impairments on financial instruments are ? A) recognized as a realized loss if the impairment is judged to be temporary B) based on discounted cash flows for securities C) based on fair value for available-for-sale investments and negotiated values for hel-to-maturity investments D) evaluated using the CECL model similiar to receivables

impairments on financial instruments are ? A) recognized as a realized loss if the impairment is judged to be temporary B) based on discounted cash flows for securities C) based on fair value for available-for-sale investments and negotiated values for hel-to-maturity investments D) evaluated using the CECL model similiar to receivables

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter16: Statement Of Cash Flows

Section: Chapter Questions

Problem 13MC: Which of the following would be included in the financing section? A. loss on sale of investments B....

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When the market value of a companys available-for-sale securities is lower than its cost, the difference should be: a. shown as a liability. b. shown as a valuation allowance added to the historical cost of the investments. c. shown as a valuation allowance subtracted from the historical cost of the investments. d. No entry is made, the securities are shown at historical cost.
Which of the following would be included in the financing section? A. loss on sale of investments B. depreciation expense C. increase in notes receivable D. decrease in notes payable
Under IFRS, a company: a. should evaluate only equity investments for impairment. b. accounts for an impairment as an unrealized loss, and includes it as a part of other comprehensive income and as a component of other accumulated comprehensive income until realized. c. calculates the impairment loss on debt investments as the difference between the carrying amount plus accrued interest and the expected future cash flows discounted at the investment's historical effective-interest rate. d. All of the above.
If in subsequent period, there is objective evidence of recovery in impairment previously recognized for debt investments measured at amortized cost, the amount of the reversal: shall not be recognized. shall be recognized in profit or loss. shall be recognized in equity. shall be recognized when the asset is derecognized.
Which of the following is correct about subsequent measurement of financial asset at fair value? a. the financial asset shall be measured at fair value if the business model is not to collect contractual cash flows on specified dates and the contractual cash flow ae not solely payment of principal and interest. b. An entity may designate a finacncial asset as measured at fair value through profit or loss even if the financial asset satisfies the amortized cost measurement. c. both are correct d. both are incorrect
Impairments of debt investments at amortized cost are recognized as component of Other Comprehensive Income. based on fair value for non-trading investments. based on discounted contractual cash flows. Evaluated at each reporting date.
Which of the following statements concerning the different types of hedging transactions is incorrect? a. In hedging transaction designated as fair value hedge, unrealized holding gain or loss on hedged item will be recognized in profit or loss. b. In hedging transaction designated as cash flow hedge, unrealized holding gain or loss on hedged item will be recognized in other comprehensive income with reclassifications adjustment to profit or loss if realized. c. In hedging transaction which is undesignated, unrealized holding gain or loss on hedging instrument will be recognized in profit or loss. d. In hedging transaction designated as hedge of net investment in foreign operation, unrealized holding gain or loss on hedging instrument which is considered effective portion will be recognized in other comprehensive income with reclassification adjustment to profit or loss if realized.
Which statement is not true? Equity investment and trading debt investment have the same accounting about how to report their unrealized gain/loss and how to report them on the balance sheet. Only debt securities, not equity securities, can be classified as held-to-maturity, available-for-sale or trading. Change in fair value of available-for-sale and held-to-maturity debt investments have no impact on net income. Cash flows relating to held-to-maturity investments and trading investments involve both investing and operating activities.
Which statement is incorrect regarding reclassification of financial assets? All reclassifications out of FVTOCI measurement category result in 'reclassification. adjustment. The effective interest rate and the measurement of expected credit losses are not adjusted as a result of the reclassification from AC measurement category to FVTOCI and vice versa. Reclassifications to FVTPL measurement category result to amounts recognized in profit or loss. The effective interest rate is determined on the basis of the fair value of the asset at the reclassification date when an entity reclassifies a financial asset out of FVTPL measurement category.
Which statement is incorrect regarding reclassification of financial assets? a) Reclassifications to FVTPL measurement category result to amounts recognized in profit or loss. b.)The effective interest rate is determined on the basis of the fair value of the asset at the reclassification date when an entity reclassifies a financial asset out of FVTPL measurement category. c.) The effective interest rate and the measurement of expected credit losses are not adjusted as a result of the reclassification from AC measurement category to FVTOCI and vice versa. d.) All reclassifications out of FVTOCI measurement category result in ‘reclassification adjustm
Q11 Which of the following options is INCORRECT regarding financial assets and the subsequent measurement model(s)? Select one: a. Financial Asset: Equity instrument Management Intention: Realise fair value changes Measurement Model: Fair value, adjustments in OCI _ b. Financial Asset: Debt instrument Management Intention: Earning contractual cash flows Measurement Model: Amortised cost _ c. Financial Asset: Equity instrument Management Intention: Realise fair value changes Measurement Model: Fair value, adjustments in SPL _ d. Financial Asset: Debt instrument Management Intention: Earning contractual cash flows Measurement Model: Fair value, adjustments in OCI _
Which of the following is not a difference between U.S. GAAP and IFRS treatment of impaired assets? Multiple Choice The use of discounted cash flow. Due to differences, U.S. GAAP may trigger an impairment loss that would not be triggered by IFRS. The right to reverse prior impairment losses when there is a change in the estimates used to measure the loss. In determining the valuation, costs to sell are deducted from fair value.