Scribd
Upload
57 views2 pages

Quiz On Debt Investment

The document discusses accounting standards related to debt investments and investment property. When a debt investment is reclassified from fair value to amortized cost, the new carrying amount is the fair value at reclassification. Transfers between fair value and amortized cost categories can affect net income depending on the categories. Investment property is property held to earn rentals or for capital appreciation. Trading bonds are reported at fair value.

Uploaded by

Ya Na
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
57 views2 pages

Quiz On Debt Investment

The document discusses accounting standards related to debt investments and investment property. When a debt investment is reclassified from fair value to amortized cost, the new carrying amount is the fair value at reclassification. Transfers between fair value and amortized cost categories can affect net income depending on the categories. Investment property is property held to earn rentals or for capital appreciation. Trading bonds are reported at fair value.

Uploaded by

Ya Na
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Debt & Property Investment

When a debt investment at FVPL is reclassified to amortized cost, what is the new carrying amount at
amortized cost? *

 Original carrying amount of the debt investment


 Fair value at reclassification rate
 Face amount of the debt investment
 Present value of the contractual cash flows

Transfers of investments between categories *

 Should always affect net income


 Result in omitting recognition of fair value in the year of the transfer.
 Are accounted for at fair value for all transfers
 Are not recognized if investments are transferred from held for collection to fair value.

Which statement best describes investment property? *

 Property held for sale in the ordinary course of business


 Property held for use in the production and supply of goods or services and property held for
administrative purposes
 Property held to earn rentals or for capital appreciation
 Property held for capital appreciation

When the interest payment dates of a bond are May 1 and November 1, and a bond is purchased on
June 1, the amount of cash paid by the investor would be *

 Decreased by accrued interest from June 1 to November 1


 Increased by accrued interest from June 1 to November 1
 Increased by accrued interest from May 1 to June 1
 Decreased by accrued interest from May 1 to June 1

When a financial asset at FVPL is reclassified to FVOCI, the new carrying amount is equal to *

 Original carrying amount


 Present value of contractual cash flows representing principal
 Present value of contractual cash flows
 Fair value at reclassification date

Trading bond investments are reported at *

 Maturity value
 Face amount
 Fair value
 Amortized cost
Which statement is true when a debt investment at FVOCI is reclassified to amortized cost? *

 All these statements are true.


 The fair value at reclassification date becomes the new carrying amount.
 The cumulative gain or loss previously recognized in OCI is removed from equity and adjusted
against the fair value at reclassification date.
 The original effective rate is not adjusted.

A transfer from investment property carried at fair value to owner-occupied property shall be accounted
for at *

 Historical cost
 Carrying amount
 Fair value less cost of disposal
 Fair value, which becomes the deemed cost

The effective interest rate on bond is lower than the stated rate when bond sells *

 At face amount
 Above face amount
 Below face amount
 At maturity value

Which statement is true when a financial asset at FVOCI is reclassified to FVPL? *

 The cumulative gain or loss previously recognized in OCI is reclassified to profit or loss.
 All these statements are true.
 The financial asset continues to be measured at fair value.
 The fair value at reclassification date becomes the new carrying amount.

You might also like