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CFAS (FINALS) > PAS 40 > Flashcards

PAS 40 Flashcards

1
Q

Which statement best describes investment property?

A. Property held for sale in the ordinary course of business
B. Property held for use in the production and supply of goods or services and property held for administrative purposes
C. Property held to earn rentals or for capital appreciation
D. Property held for capital appreciation

A

C. Property held to earn rentals or for capital appreciation

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2
Q

Which of the following statements best describes owner-occupied property?

A. Property held for sale in the ordinary course of business
B. Property held for use in the production and supply of goods or service and property held for administrative purposes
C. Property held to earn rentals
D. Property held for capital appreciation

A

B. Property held for use in the production and supply of goods or service and property held for administrative purposes

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3
Q

Investment property includes all of the following, except

A. Land held for long term capital appreciation
B. Land held for currently undetermined use
C. Building owned by the reporting entity and leased out under an operating lease
D. Property held for sale in the ordinary course of business

A

D. Property held for sale in the ordinary course of business

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4
Q

Which of the following is an investment property?

A. Property being constructed or developed on behalf of third party
B. Property that is being constructed and developed as investment property
C. Property held for future development and subsequent use as owner-occupied property
D. Owner-occupied property awaiting disposal

A

B. Property that is being constructed and developed as investment property

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5
Q

Which statement is true if the property is partly investment and partly owner-occupied?

I. If the investment and owner-occupied portions could be sold or leased out separately, the portions shall be accounted for separately as investment property and owner-occupied property.
II. If the investment and owner-occupied portions could not be sold or leased out separately, the property os investment property if only an insignificant portion is held for manufacturing or administrative purposes.

A. I only
B. II only
C. Both I and II
D. Neither I and II

A

C. Both I and II

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6
Q

If an entity owns and manages a hotel and services provided to guests are a significant component of the arrangement as a whole, the hotel os classified as

A. Investment property
B. Owner-occupied property
C. Partly investment property and partly owner-occupied property
D. Neither investment property nor owner-occupied property

A

B. Owner-occupied property

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7
Q

Which statement is true concerning property leased to an affiliate?

I. From the perspective of the individual entity that owns it, the property leased to an affiliate is considered an investment property.
II. From the perspective of the affiliates as a group and for purposes of consolidated financial statements, the property is treated as owner-occupied property.

A. Both I and II
B. Neither I nor II
C. I only
D. II only

A

A. Both I and II

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8
Q

Directly attributable expenditures related to investment property include

A. Professional fees for legal services, property transfer taxes and other transaction cost.
B. Start up costs
C. Initial operating losses incurred before the investment property achieves the planned level of occupancy.
D. Abnormal amount of wasted material, labor and other resources incurred in constructing or developing the property

A

A. Professional fees for legal services, property transfer taxes and other transaction cost.

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9
Q

Which statement is incorrect on determining the fair value of an investment property?

A. An entity shall determine the fair value of investment property by deducting transaction cost that may be incurred upon disposal.
B. Equipment such as lift or air-conditioning is often an integral part of a building and is generally included in the fair value of investment property.
C. If an office is leased on furnished basis, the fair value of the office generally includes the fair value of the furniture because the rental income relates to the furnished office.
D. The fair value of investment property excludes prepaid or accrued operating lease income.

A

A. An entity shall determine the fair value of investment property by deducting transaction cost that may be incurred upon disposal.

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10
Q

Gain or loss from disposal pf investment property shall be determined as the difference between the

A. Net disposal proceeds and carrying amount.
B. Gross disposal proceeds and carrying amount.
C. Fair value and carrying amount of the asset.
D. Gross disposal proceeds and fair value of the asset.

A

A. Net disposal proceeds and carrying amount.

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11
Q

Am investment property shall be measured initially at

A. Cost
B. Cost less impairment
C. Depreciable amount less impairment
D. Fair value less impairment

A

A. Cost

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12
Q

An investment property is derecognized when

A. It is disposed to a third party.
B. It is permanently withdrawn from use.
C. No future benefits are expected from the disposal.
D. In all of these cases

A

D. In all of these cases

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13
Q

Which additional disclosure must be made when am entity chooses the cost model?

A. The fair value of the property
B. The present value of the property
C. The value in use of the property
D. The net realizable value of the property

A

A. The fair value of the property

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14
Q

Which disclosure shall be made when the fair value model has been adopted?

A. Depreciation method used
B. The amount of impairment loss recognized
C. Useful life
D. Net gain or loss from fair value adjustments

A

D. Net gain or loss from fair value adjustments

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15
Q

Under IFRS, assets classified as investment property are

A. Held for rental income
B. To be sold for quick profit
C. Held for rental income or to be sold for a quick profit
D. Held for sale in the ordinary course of business

A

C. Held for rental income or to be sold for a quick profit

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16
Q

Subsequent to initial recognition, the investment property shall be measured using

A. Fair value or revaluation model
B. Fair value through profit or loss model
C. Cost model or fair value model
D. Cost model or revaluation model

A

C. Cost model or fair value model

17
Q

If the entity use the fair value model for the investment property, which statement is true?

A. Changes in the fair value are reported in profit or loss in the current period.
B. Changes in fair value are reported as an extraordinary gain.
C. Changes in fair value are reported in other comprehensive income for the period.
D. Changes in fair value are reported as deferred revenue for the period.

A

A. Changes in the fair value are reported in profit or loss in the current period.

18
Q

If the entity uses the fair value model for investment property, which statement is true?

A. The entity should value the property at cost less accumulated depreciation and impairment.
B. The entity should report the increase in fair value in other comprehensive income for the period.
C. The entity depreciates the equipment using normal depreciation method.
D. The entity does not record depreciation on the investment property.

A

D. The entity does not record depreciation on the investment property.

19
Q

Transfers from investment property to PPE are appropriate

A. When there is change of use.
B. Based on the discretion of management.
C. Only when the entity adopts the fair value model.
D. The entity cam never transfer property into another classification once it is classified as investment property

A

A. When there is change of use.

20
Q

When the entity uses the cost model, transfer between investment property, owner-occupied property and inventory shall be accounted for at

A. Fair value
B. Carrying amount
C. Cost
D. Assessed value

A

B. Carrying amount

21
Q

A transfer from investment property carried at for value to owner-occupied property shall be accounted for at

A. Fair value, which becomes the deemed cost
B. Carrying amount
C. Historical cost
D. Fair value less cost of disposal

A

A. Fair value, which becomes the deemed cost

22
Q

If owner-occupied property is transferred to investment property that is to be carried at fair value, the difference between the carrying amount of the property and the fair value shall be

A. Included in profit or loss
B. Included in retained earnings
C. Included in equity
D. Accounted for as revaluation of PPE

A

D. Accounted for as revaluation of PPE

23
Q

If am inventory os transferred to investment property that is to be carried at fair value, the remeasurement to fair value is

A. Included in profit or loss
B. Included on equity
C. Included in retained earnings
D. Accounted for as revaluation of inventory

A

A. Included in profit or loss

24
Q

When an investment property under construction is completed and carried at fair value, the difference between fair value and carrying amount should be

A. Disregarded
B. Included in profit or loss
C. Recognized in retained earnings
D. Accounted for as revaluation

A

B. Included in profit or loss

CFAS (FINALS) (9 decks)

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