PROBLEM 1: MULTIPLE CHOICE 1. During the period, an entity acquires an investment. The entity has a "hold to collect and sell" business model. The investment should be classified as a. investment measured at fair value through other comprehensive income. b. investment measured at amortized cost. investment measured at fair value through profit or loss. C. d. any of these 2. If an entity's business model's objective is to hold investments in order to collect contractual cash flows that are solebu payments for principal and interests, then investments should be classified as a. investment measured at fair value through other comprehensive income. b. investment measured at amortized cost. investment measured at fair value through profit or loss. of these C. d. any 3. A permanent decline in the fair value of an investment in equity securities that the entity made an irrevocable election at initial recognition to subsequently measure at FVOCI is recognized in a. profit or loss. b. other comprehensive income. c. either a or b d. not recognized

PROBLEM 1: MULTIPLE CHOICE 1. During the period, an entity acquires an investment. The entity has a "hold to collect and sell" business model. The investment should be classified as a. investment measured at fair value through other comprehensive income. b. investment measured at amortized cost. investment measured at fair value through profit or loss. C. d. any of these 2. If an entity's business model's objective is to hold investments in order to collect contractual cash flows that are solebu payments for principal and interests, then investments should be classified as a. investment measured at fair value through other comprehensive income. b. investment measured at amortized cost. investment measured at fair value through profit or loss. of these C. d. any 3. A permanent decline in the fair value of an investment in equity securities that the entity made an irrevocable election at initial recognition to subsequently measure at FVOCI is recognized in a. profit or loss. b. other comprehensive income. c. either a or b d. not recognized

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter18: Comparative Forms Of Doing Business

Section: Chapter Questions

Problem 12P

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Under fair-value accounting for an equity investment, which of the following affects the income the investor recognizes from its ownership of the investee? The investee’s reported income adjusted for excess cost over book value amortizations. Changes in the fair value of the investor’s ownership shares of the investee. Intra-entity profits from upstream sales. Other comprehensive income reported by the investee.
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