PAS 32 Flashcards
A contract that will be settled by the entity receiving or delivering a
fixed number of its own equity instruments in exchange for a fixed
amount of cash or another financial asset is most likely to be classified by the issuer as
A. A financial liability
B. An equity instrument
C. A or B
D. Neither A nor B
b
Which of the following is classified as an equity instrument rather than
a financial liability?
A. Preference shares that are mandatorily redeemable
B. A contract that is settled by delivery of a variable number of the
entity’s own equity instruments in exchange for a fixed amount of
cash or another financial asset.
C. A contract that is settled by the delivery of a fixed number of the
entity’s own equity instruments in exchange for a variable amount
of cash or another asset.
D. Shares issued but were subsequently reacquired.
d
Which of the following statement is correct?
A. Entity A reacquires its own shares for ₱10,000. The shares were
originally issued for ₱4,000. Entity A recognizes a loss of ₱6,000.
B. Gains and losses arising from a financial liability are recognized
directly in equity.
C. Entity A declares dividends. Entity A will recognize the amount of
the dividends as expense in profit or loss.
D. Entity A settles a liability with carrying amount of ₱100,000 for
₱85,000. This transaction results to a ₱15,000 gain that is
recognized in profit or loss.
d
Entity A has an accounts receivable of 200,000 from
Entity B. In addition, Entity A has an accounts payable of
160,000 to Entity B. The accounts receivable is due in 30
days while the accounts payable is due in 90 days. Entity
A intends to settle first the accounts receivable.
Required: If Entity A has legal right to set-off, how
much account receivable will be shown in its statement of
financial position?
200k
Entity A issues convertible bonds with face amount of
₱2,000,000 for ₱2,600,000. Each ₱1,000 bond is convertible into
10 shares with par value of ₱60 per share. On issuance date, the
bonds are selling at 102 without the conversion option.
Required: What is the value allocated to the equity component
on initial recognition?
560k
