Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Financial Reporting > Ch. 4 - Financial Instruments - Passive Investments > Flashcards

Ch. 4 - Financial Instruments - Passive Investments Flashcards

1
Q

Initial Measurement - How

A

Initial measurement is done at fair value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Initial Recognition - When

A

When the entity gains control over the asset

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Subsequent Measurement - Different measurement options

A
  1. Cost
  2. FVTOCI
  3. FVTPL
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Subsequent Measurement - FVTPL includes

A
  1. Assets not qualified to be recorded at amortized cost
  2. Assets qualified as held for trading
  3. Assets that are designated as FVTPL
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Subsequent Measurement - Assets held for trading

A

must meet one of the following:

  1. it is acquired principally for the purpose of selling or repurchasing in the near term
  2. It is added to a portfolio of financial instruments that have a pattern of short-term trading
  3. it is a derivative
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Subsequent Measurement - FVTPL (Transaction Cost Treatment)

A
  1. expensed in net income when incurred
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Subsequent Measurement - FVTPL (subsequent measurement)

A

measured at fair value with gains/losses to net income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Subsequent Measurement - Amortized Cost includes

A

financial assets held to collect contractual cash flows consisting of principal and interest

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Subsequent Measurement - Amortized Cost (transaction cost treatment)

A

added to the cost of the investment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Subsequent Measurement - Amortized Cost (subsequent measurement)

A

recorded using effective interest method less impairment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Subsequent Measurement - Amortized Cost (impairment)

  1. when is it impaired
  2. how is it recorded
A
  1. impairment is recorded when estimated future cash flows is less than carrying value
  2. is recorded in net income
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Subsequent Measurement - FVTOCI includes

A
  1. Equity investments designated as FVTOCI (cannot be investments held for trading)
  2. Debt instruments with payments consisting of principal and interest with the purpose to receive payments or sell the instrument
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Subsequent Measurement - FVTOCI (transaction cost treatment)

A

capitalized as part of the investment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Subsequent Measurement - FVTOCI (subsequent measurement)

  1. Debt
  2. Equity
A
  1. Debt: measured at amortized cost and remeasured to FV with gains/losses to OCI
  2. Equity: measured at fair value, with gains/losses to OCI
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Derecognition

  1. General
  2. Debt through FVTOCI
  3. Equity through
A
  1. difference between amount received and carrying value is recorded to P/L
  2. Debt instruments with G/L in OCI are moved to P/L
  3. Equity with G/L in OCI is transferred directly to equity (R/E)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

ASPE Differences

  1. the following are measured at fair value
  2. the following are recorded at cost
A
  1. investments in equity instruments quoted in an active market and certain derivatives
  2. All others

Financial Reporting (39 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions