identification Flashcards
A __________ is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
financial instrument
A particular type of financial instrument which is popularly known business entities as _________
investment
Financial instruments specifically _____ allow the holder to exercise financial flexibility and earn from other sources apart from its main source of income.
financial assets
_______________ means being able to take advantage of other opportunities to earn from one’s extra resources.
Financial flexibility
Financial instruments provides that a financial asset may be measure at _____________, _________________, _______
FVPL, FVOCI, FVAC
The designation of a financial asset to any of the classificiations mentioned depends on two tests, namely, the ___________ and the __________
contractual cash test and the business model test
The _______________ asks if an entity is holding a financial instrument solely for the collection of interest and dividends that may be received from its investment.
contractual cash flow test
The ________ on the other hand simply asks the intention of an entity, which may only be determined by the decision of management personnel.
business model test.
Asset classification: current, Measured at: fair value, Form of instrument: Equity and debt
Financial asset at FVPL
Asset classification: non current , Measured at: fair value, Form of instrument: Equity and debt
FInancial asset at FVOCI
Asset classification: non current , Measured at: amortized cost, Form of instrument: Debt only
Financial asset at ammortized cost.
_______________ are shares of stocks bought by an investor from a corporation. The investment may be measured at fair value through profit or loss (FVPL).
Equity instruments
Invemstments designated as FA_FVPL are intiall recognized at _________.
fair value
The changes in the fair value are recognized on the ________________ statement.
profit or loss
If the current fair value is higher than the previous fair value, the entity records an ____________ , otherwise it records an ___________.
unrealized gain and unrealized loss.
the words unrealized means the investment is not yet _______.
sold
If the selling price differs from the ___________. The sale is technically termed ___________ in financial accounting.
current fair value & derecognition.
__________ investments designated as ____________ are initially recorded at _________ similar to FA FVPL.
Equity, FAFVOCI, face value
Transactions costs ___________ expensed this time, but are included as part of the purchase price or fair value of the investment.
are not
Transaction costs dirrectly attributable to the acquisition of this type of instrument are _______
expensed.
FVOCI investments are subsequently recorded at _______, but the changes in fair values would be recorded as unrealized _______ or ______ on the statement of ______________ rather than the _____________- statement
fair value, gain or losses, comprehensive income, profit or loss.
Furthermore the same intial change in fair values is also recorded as _______________ unrealized gain or loss on the equity side of the statement of financial position.
cumulative
The new cumulative unrealized gain or loss is determined by getting the _____________________ of the investment and the _____________________.
the first fair value of the investment and the current year end fair value.
This difference would be reflected on the ___________ side of the statement of ____________________.
equity and financial position.
