Review-1 - Lecture notes 1 PDF

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Depending on the business model for managing financial assets, an entity shall classify financial assets subsequent to initial recognition at a. Fair value through profit or loss b. Amortized cost c. Fair value through other comprehensive income d. All of these are used in measuring financial assets...

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1. Depending on the business model for managing financial assets, an entity shall classify financial assets subsequent to initial recognition at a. Fair value through profit or loss b. Amortized cost c. Fair value through other comprehensive income d. All of these are used in measuring financial assets 2. Which of the following is a characteristic of a financial asset held for trading? a. It is acquired principally for the purpose of selling or repurchasing it in the near term. b. It is part of a portfolio of financial assets that are managed together and for which there is actual pattern of short-term profit taking. c. It is a derivative that is not designated as an effective hedging instrument. d. All of these are correct. 3. A debt investment is measured at amortized cost a. By irrevocable election b. When the debt investment is managed and evaluated on a document risk-management strategy. c. When the debt investment is held for trading d. When the business model is to collect contractual cash flows that are solely payments of principal and interest. 4. The irrevocable election to present changes in fair value in other comprehensive income is applicable only to a. Investment in equity instrument not held for trading. b. Investment in equity instrument held for trading. c. Financial asset measured at amortized cost. d. Financial asset measured at fair value. 5. All of the following shall be measured at FVPL, except a. Financial asset held for trading b. Debt investment irrevocably designated at FVPL c. Investment in quoted equity instrument d. Debt investment at amortized cost...