FAR 4

Question 1

Fixed Asset

Gain/loss with Commercial Substance

Answer 1

Recognize Gain/Loss immediately

Gain = fair value of old asset - (carrying value of old asset)

Question 2

FOB Destination

Answer 2

Title passes when received by the buyer, shipping, packaging, handing are cost of seller

Question 3

FOB Shipping point

Answer 3

Tittle passes when it leaves the seller’s location, shipping cost is a cost of the buyer

Question 4

IFRS - Investment Property

FAR 4

Answer 4

IFRS classified property as investment property when it earns rent or has capitalization

Question 5

Asset held for sale is reported as

Answer 5

Net realizable value (FV-cost)

Question 6

Start-up cost is

Answer 6

One time related activities that are expensed in the period incurred

Question 7

Capital Lease that change its terms to become operating lease should be treated as

Answer 7

Sales-back lease

Question 8

Dollar LIFO inventory calculation

Answer 8

Step 1: calculate Y2 to base year amount (Y2 amount give/base year index)
Step 2: Determine Y2 layer: beginning LIFO - amount calculate in step 1
Step 3: step 2 amount x price index
step 4: beginning LIFO amount + step 3 amount