Question 1

Explain why non-current assets held for sale are valued at fair value less costs to sell rather than at their value in use.

Accepted Answer

Fair value less costs to sell is the mor

Question 2

Company Twelve purchased land for $900,000 some years ago.Fair value was $800,000 at the beginning of this year and $1,000,000 at the end of this year.
Prepare the journal entry to record this year's revaluation adjustment.

Accepted Answer

@#IMG-DLM& * Gain of $100,000 recorded t

Question 3

What is a "component" of an entity?

Accepted Answer

A) A division of an entity that either has been disposed of or is classified as held for sale. 
B) A group of assets and liabilities to be disposed of together in a single transaction. 
C) A part of an entity with operations and cash flows distinguishable from the rest of the entity. 
D) A group of non-current assets that have been disposed or are classified as held for sale. 
A) A division of an entity that either has been disposed of or is classified as held for sale. 
B) A group of assets and liabilities to be disposed of together in a single transaction. 
C) A part of an entity with operations and cash flows distinguishable from the rest of the entity. 
D) A group of non-current assets that have been disposed or are classified as held for sale.

Question 4

Wilson Inc wishes to use the revaluation model for this property:
 
The fair value for the property is $40,000.Assuming this is the first year of using the revaluation model,which of the following amounts will be booked?

Accepted Answer

A) $40,000 debit to profit and loss. 
B) $40,000 credit to profit and loss. 
C) $40,000 debit to OCI. 
D) $40,000 credit to OCI. 
A) $40,000 debit to profit and loss. 
B) $40,000 credit to profit and loss. 
C) $40,000 debit to OCI. 
D) $40,000 credit to OCI.

Question 5

Which of the following is not a concept supporting impairment testing?

Accepted Answer

A) An asset should be presented at its fair value. 
B) An asset's carrying value should be recoverable from sale. 
C) An asset's carrying value should be recoverable from use. 
D) An asset should not be overstated. 
A) An asset should be presented at its fair value. 
B) An asset's carrying value should be recoverable from sale. 
C) An asset's carrying value should be recoverable from use. 
D) An asset should not be overstated.

Question 6

Explain how an impairment loss is allocated to non-current assets that are part of a cash generating unit.

Accepted Answer

An enterprise should allocate the impair

Question 7

What is a "disposal group"?

Accepted Answer

A) A component of an entity that either has been disposed of or is classified as held for sale. 
B) A group of assets and liabilities to be disposed of together in a single transaction. 
C) A component with operations and cash flows distinguishable from the rest of the entity. 
D) A group of current assets that will be recovered through sale rather than continuing use. 
A) A component of an entity that either has been disposed of or is classified as held for sale. 
B) A group of assets and liabilities to be disposed of together in a single transaction. 
C) A component with operations and cash flows distinguishable from the rest of the entity. 
D) A group of current assets that will be recovered through sale rather than continuing use.

Question 8

Which of the following is correct with respect to the "impairment loss"?

Accepted Answer

A) It is defined as the carrying amount less recoverable amount under IFRS. 
B) It is defined as the carrying amount less recoverable amount under ASPE. 
C) Under IFRS,it is defined as the sum of the undiscounted cash flows expected from use of the asset. 
D) Under ASPE,it is defined as the sum of the undiscounted cash flows expected from use of the asset. 
A) It is defined as the carrying amount less recoverable amount under IFRS. 
B) It is defined as the carrying amount less recoverable amount under ASPE. 
C) Under IFRS,it is defined as the sum of the undiscounted cash flows expected from use of the asset. 
D) Under ASPE,it is defined as the sum of the undiscounted cash flows expected from use of the asset.

Question 9

Information about the PPE for Jeremy Inc.is provided below.The company held the land and building to earn rental income and appropriately applied the fair value model for the land and building.Assume that the company takes a full of depreciation each year under the straight line method.
The company decided to use the building as its new head office at the beginning of year 3.
Prepare the journal entries required to record the change in use for Year 3.

Accepted Answer

The answer of Information about the PPE for Jeremy Inc.is...

Question 10

Explain why non-current assets held for sale are recorded at the lower of carrying value and fair value less costs to sell.

Accepted Answer

Non-current assets held for sale should

Question 11

What impairment,if any,exists on these product lines?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 12

Smith Inc wishes to use the revaluation model for this property:
 
The fair value for the property is $150,000.What amount would be booked to the "accumulated depreciation" account if Smith chooses to use the elimination method to record the revaluation?

Accepted Answer

A) $60,000 debit. 
B) $60,000 credit. 
C) $90,000 credit. 
D) $150,000 debit. 
A) $60,000 debit. 
B) $60,000 credit. 
C) $90,000 credit. 
D) $150,000 debit.

Question 13

Which is an exception to the rule: "test for impairment only if there are indicators for impairment"?

Accepted Answer

A) Intangible assets with indefinite lives. 
B) Intangible assets with definite lives. 
C) Internally generated goodwill. 
D) Tangible assets with definite lives. 
A) Intangible assets with indefinite lives. 
B) Intangible assets with definite lives. 
C) Internally generated goodwill. 
D) Tangible assets with definite lives.

Question 14

When should an entity select the exception to using "fair value less point of sale costs" approach for biological assets?

Accepted Answer

A) At time of initial recognition upon acquisition. 
B) If the entity cannot obtain fair value information. 
C) At time of subsequent measurement on each balance sheet. 
D) If the entity can obtain fair value information. 
A) At time of initial recognition upon acquisition. 
B) If the entity cannot obtain fair value information. 
C) At time of subsequent measurement on each balance sheet. 
D) If the entity can obtain fair value information.

Question 15

Wallace Inc wishes to use the revaluation model for this property:
 
The fair value for the property is $60,000.Assuming this is the first year of using the revaluation model,what amount would be booked to the "other comprehensive income" account if Wallace chooses to use the proportional method to record the revaluation?

Accepted Answer

A) $0 
B) $10,000 debit. 
C) $10,000 credit. 
D) $20,000 debit. 
A) $0 
B) $10,000 debit. 
C) $10,000 credit. 
D) $20,000 debit.

Question 16

What impairment,if any,exists on this product line?

Accepted Answer

A) $0 
B) $900,000 
C) $1,200,000 
D) $4,000,000 
A) $0 
B) $900,000 
C) $1,200,000 
D) $4,000,000

Question 17

Bean World Company produces two distinct product lines: dried beans and canned beans.Due to changing consumer tastes,the company is evaluating these two cash generating units for impairment for the year ending December 31,2016.Relevant information is as follows:
   
Required:
Determine whether either product line is impaired,and if so,the amount of the impairment.

Accepted Answer

Dried beans
 @#IMG-DLM& 
Since fair value less cos

Question 18

Which statement is correct about using the "fair value less point of sale costs" approach for biological assets?

Accepted Answer

A) The exception to "cost less depreciation" can be made at any subsequent measurement date. 
B) Fair value may not be available for initial recognition,but could be used for subsequent measurement. 
C) Fair value may be available for initial recognition,but then not be used for subsequent measurement. 
D) Under this accounting method,fair value can only be higher than cost. 
A) The exception to "cost less depreciation" can be made at any subsequent measurement date. 
B) Fair value may not be available for initial recognition,but could be used for subsequent measurement. 
C) Fair value may be available for initial recognition,but then not be used for subsequent measurement. 
D) Under this accounting method,fair value can only be higher than cost.

Question 19

Which of the following is correct with respect to the "recoverable amount"?

Accepted Answer

A) It is defined as the lower of the value in use or fair value less cost to sell under IFRS. 
B) It is defined as the lower of the value in use or fair value less cost to sell under ASPE. 
C) Under IFRS,it is defined as the sum of the undiscounted cash flows expected from use of the asset. 
D) Under ASPE,it is defined as the sum of the undiscounted cash flows expected from use of the asset. 
A) It is defined as the lower of the value in use or fair value less cost to sell under IFRS. 
B) It is defined as the lower of the value in use or fair value less cost to sell under ASPE. 
C) Under IFRS,it is defined as the sum of the undiscounted cash flows expected from use of the asset. 
D) Under ASPE,it is defined as the sum of the undiscounted cash flows expected from use of the asset.

Question 20

How should a discontinued operation be presented in the financial statements?

Accepted Answer

A) Summary information is presented as well as a subsequent provision of more extensive breakdowns of revenues,expenses,taxes,and financing cash flow figures. 
B) Separate discussion is not required in the financial statement notes. 
C) Presentation of separate amounts in the statement of comprehensive income,net of tax. 
D) Presentation of a single amount in the statement of comprehensive income,before tax. 
A) Summary information is presented as well as a subsequent provision of more extensive breakdowns of revenues,expenses,taxes,and financing cash flow figures. 
B) Separate discussion is not required in the financial statement notes. 
C) Presentation of separate amounts in the statement of comprehensive income,net of tax. 
D) Presentation of a single amount in the statement of comprehensive income,before tax.

Explain why non-current assets held for sale are valued at fair value less costs to sell rather than at their value in use.

Company Twelve purchased land for $900,000 some years ago.Fair value was $800,000 at the beginning of this year and $1,000,000 at the end of this year. Prepare the journal entry to record this year's revaluation adjustment.

What is a "component" of an entity?

Wilson Inc wishes to use the revaluation model for this property: The fair value for the property is $40,000.Assuming this is the first year of using the revaluation model,which of the following amounts will be booked?

Which of the following is not a concept supporting impairment testing?

Explain how an impairment loss is allocated to non-current assets that are part of a cash generating unit.

What is a "disposal group"?

Which of the following is correct with respect to the "impairment loss"?

Explain why non-current assets held for sale are recorded at the lower of carrying value and fair value less costs to sell.

What impairment,if any,exists on these product lines?

Smith Inc wishes to use the revaluation model for this property: The fair value for the property is $150,000.What amount would be booked to the "accumulated depreciation" account if Smith chooses to use the elimination method to record the revaluation?

Which is an exception to the rule: "test for impairment only if there are indicators for impairment"?

When should an entity select the exception to using "fair value less point of sale costs" approach for biological assets?

What impairment,if any,exists on this product line?

Which statement is correct about using the "fair value less point of sale costs" approach for biological assets?

Which of the following is correct with respect to the "recoverable amount"?

How should a discontinued operation be presented in the financial statements?

Fundamentals of Financial Accounting Theory

Conceptual Frameworks for Financial Reporting

Accrual Accounting

Revenue and Recognition

Cash and Receivables

Inventories

Financial Assets

Property, plant and Equipment

Intangible Assets, goodwill, mineral Resources, and Government Grants

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Exam 10: Applications of Fair Value to Non-Current Assets

Explain why non-current assets held for sale are valued at fair value less costs to sell rather than at their value in use.

Company Twelve purchased land for $900,000 some years ago.Fair value was $800,000 at the beginning of this year and $1,000,000 at the end of this year. Prepare the journal entry to record this year's revaluation adjustment.

What is a "component" of an entity?

Wilson Inc wishes to use the revaluation model for this property: The fair value for the property is $40,000.Assuming this is the first year of using the revaluation model,which of the following amounts will be booked?

Which of the following is not a concept supporting impairment testing?

Explain how an impairment loss is allocated to non-current assets that are part of a cash generating unit.

What is a "disposal group"?

Which of the following is correct with respect to the "impairment loss"?

Explain why non-current assets held for sale are recorded at the lower of carrying value and fair value less costs to sell.

What impairment,if any,exists on these product lines?

Smith Inc wishes to use the revaluation model for this property: The fair value for the property is $150,000.What amount would be booked to the "accumulated depreciation" account if Smith chooses to use the elimination method to record the revaluation?

Which is an exception to the rule: "test for impairment only if there are indicators for impairment"?

When should an entity select the exception to using "fair value less point of sale costs" approach for biological assets?

What impairment,if any,exists on this product line?

Which statement is correct about using the "fair value less point of sale costs" approach for biological assets?

Which of the following is correct with respect to the "recoverable amount"?

How should a discontinued operation be presented in the financial statements?

Fundamentals of Financial Accounting Theory

Conceptual Frameworks for Financial Reporting

Accrual Accounting

Revenue and Recognition

Cash and Receivables

Inventories

Financial Assets

Property, plant and Equipment

Intangible Assets, goodwill, mineral Resources, and Government Grants

Filters