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What is the meaning of the following:-
IAS 40 paragraph 32A, An entity may:
(a) choose either the fair value model or the cost model for all investment property backing liabilities that pay a return linked directly to the fair value of, or returns from, specified assets including that investment property; and
(b) choose either the fair value model or the cost model for all other investment property, regardless of the choice made in (a).
Step by step
Solved in 3 steps
- Which one of the following is not true concerning the treatment of investment properties under IAS 40? A Following initial recognition, investment property can be held at either cost or fair value. B If an investment property is held at fair value, this must be applied to all of the entity's investment property. C An investment property is initially measured at cost, including transaction costs. D A gain or loss arising from a change in the fair value of an investment property should be recognised in other comprehensive income.Which one of the following is not true concerning the treatment of investment properties under LKAS 40? Select one: a. If an investment property is held at fair value, this must be applied to all of the entity's investment property. b. A gain or loss arising from a change in the fair value of an investment property should be recognized in other comprehensive income c. Following initial recognition, investment property can be held at either cost or fair value d. An investment property is initially measured at cost, including transaction costs.If an entity wishes to change from a cost model to fair value model under IAS 40 – Investment Property, when may it do so? Select one: a. When the market for these properties is fluctuation b. When the board of directors approves a change c. When the value of the assets will improve with a revised model d. When a change will result in a more appropriate presentation
- All of the following statements are true, except: * a. When property is acquired in exchange for another, its cost is usually determined by reference to the fair value of the asset surrendered b. Property acquired in exchange for shares or other securities of the enterprise should be recorded at its fair value or the fair value of the securities, whichever is more clearly evident c. Donation of PPE should be recorded at the fair value of the donated asset d. When a group of assets is acquired for a lump sum price, the lump sum price should be allocated to the individual assets based on their carrying values.All of the following statements are true, except: When property is acquired in exchange for another, its cost is usually determined by reference to the fair value of the asset surrendered When a group of assets is acquired for a lump sum price, the lump sum price should be allocated to the individual assets based on their carrying values. Donation of PPE should be recorded at the fair value of the donated asset Property acquired in exchange for shares or other securities of the enterprise should be recorded at its fair value or the fair value of the securities, whichever is more clearly evident26 Which of the following is not a characteristics of an investment property? a. land and/or building b. held to earn rentals or for capital appreciation c. held by an owner or a lessee under finance lease d. always accounted for using the fair value model
- Under IFRS, which of the following statements describes the fair value model for accounting for investment properties? Question 12 options: a) All investment properties are remeasured at fair value at each reporting date. b) Depreciation is recorded over the investment property’s useful life. c) Gains or losses arising from changes in fair value are recognized in other comprehensive income in the period in which they arise. d) Accumulated gains and losses are recognized in profit or loss in the period in which the investment property is derecognized.If an entity was not able to determine the fair value of both the asset received and the asset given up, which is used in measuring the cost of the asset received? Group of answer choices fair value of the asset given up. fair value of the asset received. either fair value of the asset given up or carrying value of the asset given up carrying value of the asset given upWhich of the following statement best defines an asset? a. An asset is a resource owned by the entity with a financial value b. An asset is resource controlled by the entity from which future economic benefits are expected to be generated c. An asset is a resource controlled by an entity because of past events d. An asset is a resource controlled by an entity as a result of past events from future economic benefits are expected to be generated
- Investment Property can be classified under the following methods except? Cost Cost and Fairvalue Fair Value Non of the Given3 The following statements are true about the fair value of property investment, except_______. Select one: a. the term arm's length transaction means that the transaction is one between parties that have a particular or special relationship that makes prices of transactions typical of market conditions b. the term knowledgeable means that both the willing buyer and the willing seller are reasonably informed about the nature and characteristics of the investment property c. a willing buyer is motivated, but not compelled, to buy d. a willing seller is neither an over-eager nor a forced seller, prepared to sell at any price, nor one prepared to hold out for a price not considered reasonable in current market conditionsIf a company uses the fair value model to value investment property, changes in the fairvalue of the asset are least likely to aff ect:A. net income.B. net operating income.C. other comprehensive income.