The realized gain (loss) on sale of debt investments with an objective of collecting contractual cash flows and to sell when circumstances warrants is the difference of the net selling price and the fair value of the bonds. Group of answer choices False True
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- Investment in debt instruments classified as FA@FVTOCI recognizes which of the following in OCI? A. Interest calculated using the effective interest method. B. All of these. C. Changes in fair value D. Impairment gains and lossesAn unrealized holding gain or loss on a trading debt investment is the difference between the investments Select one: a. fair value and original cost. b. fair value and amortized cost. c. face value and amortized cost. d. face value and original cost.2. Which of the following correctly matches the classification of the debt investment with its initial measurement? Classification Initial measurement A. Fair value through other comprehensive income B. Amortized cost C. Fair value through profit or loss Fair value Fair value plus transaction costs Fair value minus transaction costs D. None of the above
- Investment in debt instruments classified as FA@FVTOCI recognizes which of the following in OCI? Group of answer choices Impairment gains and losses All of these Interest calculated using the effective interest method. Changes in fair valueDebt financing can enable the return on assets to be greater than the return on equity True False uestionDebt investment are initially recorded at: Cost Cost plus accrued interest Fair value None of the above
- What is the effective interest rate of a bond or other debt instrument measured at amortized cost? Select the correct response: The interest rate currently charged by the entity or by others for similar debt instruments (i.e., similar remaining maturity, cash flow pattern, currency, credit risk, collateral, and interest basis). The interest rate that exactly discounts estimated future cash payments or receipts through the expected life of the debt instrument or, when appropriate, a shorter period to the net carrying amount of the instrument. The basic, risk-free interest rate that is derived from observable government bond prices The stated coupon rate of the debt instrument.type of liabilities: Trade and other payables defination ? Accrued mark-up defination ? Current maturity of long term financing defination ? Short term borrowings defination ? Unclaimed dividend defination ?Use IFRS 9 to determine how to subsequently measure the following financial assets. Three choices of measurement basis are amortized cost, fair value through other comprehensive income, and fair value through profit or loss. Provide justification for your choice. Long-term loans that are held for collecting contractual cash flows till their maturities, but may be subsequently sold if the loans’ credit risk substantially increases. Investments in bonds that are held for collecting contractual cash flows, and may be subsequently sold to re-invest the cash in financial assets with a higher return. Subprime (high risk) mortgage loans that were originated by a mortgage-broker firm that always sell these loans to banks right after their origination. Forward contracts that an EU bank purchased to hedge the exposure to changes in fair value of US$-denominated loans. Investment in bonds that are convertible into common stock of the bond issuer. Investment in bonds that pay a variable market…
- Interest revenue for debt investments at fair value through other comprehensive income is computed based on the instruments’ a. face value using the effective interest rate. b. face value using the nominal interest rate. c. carrying amount using the effective interest rate. d. carrying amount using the nominal interest rate.Matching Select the term that best fits each of the following definitions and descriptions. a. Long-term debt b. Callable bonds c. Troubled debt restructuring d. Serial bonds e. Commodity-backed bonds f. Term bonds g. Convertible bonds h. Bond indenture i. Straight-line method j. Off-balance-sheet financing k. Stated interest rate l. Bond discount m. Zero-interest bonds n. Early extinguishment of debt o. Debenture bonds p. Junk bonds q. Bearer bonds r. Registered bonds s. Bond issuance costs t. Secured bonds 32. Provides for recognition of an equal amount of premium or discount amortization each period. 33. Bonds that mature in one lump sum at a specified future date. 34. Bonds that provide for conversion into some other security at the option of the stockholder. 35. Bonds that mature in a series of installments at future dates. 36.…(i). Debt investments not plan to sell reported at a. amortized cost. b. fair value. c. the lower of amortized cost of fair value. d. net realizable value. (ii). which of the following caa be reported at fair value? a. Debt investments. b. Equity investments. c. Both debt and equity investments: d None of these answers' choices are correct.