Which of the following statements is true? a. Borrowing costs are generally expensed except when they are avoidable and relate to the acquisition or construction of a qualifying asset. b. Borrowing costs are generally capitalized except when they do not relate to the acquisition or construction of a qualifying asset. c. Borrowing costs may or may not be capitalized depending on the accounting policy chosen by an entity. d. Exchange differences are ignored when determining borrowing costs.

Which of the following statements is true? a. Borrowing costs are generally expensed except when they are avoidable and relate to the acquisition or construction of a qualifying asset. b. Borrowing costs are generally capitalized except when they do not relate to the acquisition or construction of a qualifying asset. c. Borrowing costs may or may not be capitalized depending on the accounting policy chosen by an entity. d. Exchange differences are ignored when determining borrowing costs.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 10MC

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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
According to PAS 23, borrowing costs are capitalized when * A. They relate directly to the acquisition, construction, or production of a qualifying asset. B. The entity chooses to capitalize them C. They are material and are expected to be incurred over more than one reporting period. D. All of the options
In which of the following areas does the IASB not allow firms to choose between two acceptable treatments?a. Measuring property, plant, and equipment subsequent to acquisition.b. Measuring noncontrolling interest in a business combination.c. Recognizing development costs that meet criteria for capitalization as an asset.d. Classifying interest paid in the statement of cash flows.
Choose the correct. In which of the following areas does the IASB not allow firms to choose between two acceptable treatments?a. Measuring property, plant, and equipment subsequent to acquisition.b. Measuring noncontrolling interest in a business combination.c. Recognizing development costs that meet criteria for capitalization as an asset.d. Classifying interest paid in the statement of cash flows.
Which among the sentences below is incorrect?A. An entity shall measure a current asset or disposal group classified as held for sale at the lower of carrying amount or fair value less cost of disposal.B. One of the conditions that exists if the sale is highly probable is that there is an active program to locate a buyer and complete the plan must have been initiated.C. Impairment loss is the writedown to fair value less cost of disposal.D. An entity can recognize a gain if there is a subsequent increase in fair value less cost of disposal but only up to the impairment loss previously recognized.
Which of the following refers to the similarity between the U.S. GAAP and IFRS regarding accounting for Long-Lived Assets? Depreciation is based on the fair value of assets. An impairment loss occurs if the carrying value exceeds the recoverable amount, defined as the higher of the asset’s fair value (less costs to sell) and its value in use, which is the discounted net cash flows. For the purposes of determination which expenses may be capitalized, Research and Development expenditures are treated differently. Intangible assets are acquired at amortized cost.
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 evident
Which of the following statements in incorrect? a. Donations of PPE should be recorded at the fair value of the donated asset at the time of donation. b. Property acquired in exchange for shares or other securities in the enterprise should be recorded at its fair value or the fair value of the securities, whichever is more clearly evident c. When property is acquired in exchange for another asset without commercial substance, no gain nor loss is recognized d. When a group of assets is acquired for a lump sum price, the total cost should be allocated to the individual assets based on their carrying amounts.
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.
Where the payment of an investment property is deferred beyondnormal credit terms, how should the entity account for anyadditional payment above the cash cost of the asset?
The cost of a nonmonetary asset acquired in exchange for another nonmonetary asset when the exchange has commercial substance is usually recorded at A) either the fair value of the asset given up or the asset received, whichever one results in the largest gain (smallest loss) to the company. B) the fair value of the asset received if it is equally reliable as the fair value of the asset given up. C) the fair value of the asset given up, and a gain or loss is recognized. D) the fair value of the asset given up, and a gain but not a loss may be recognized.
Which of the following statements is TRUE? a. The acquirer shall measure the identifiable assets acquired and the liabilities assumed at their acquisition-date fair value. b. Transaction costs directly related to the issue of debt instruments are deducted from the fair value of the debt on initial recognition and are amortized over the life of the debt as part of the effective interest rate. Directly attributable transaction costs incurred issuing equity instruments are deducted from revenue. c. In net asset acquisition, gain on bargain purchase is recognized in the Profit or Loss of the acquirer (after reassessment) if the consideration transferred is more than the fair value of net assets acquired. d. According to IFRS #3: Revised, cost directly attributable in effecting the business combination (e.g., finders’ fee and other direct cost) must be charged to share premium.