ACCT 5410 QUIZ 5

contingent asset

"According to IAS 37, a(n) ______ is a probable asset that arises from past events and whose existence will be confirmed only by the occurrence of a future event."

unavoidable, exceed

"According to IAS 37, an onerous contract is a contract in which the ______ costs of meeting the obligation of of the contract ______ the economic benefits expected to be received from it."

tax laws, rates

Select the best answer to complete the following statement: "IAS 12 requires that current and deferred taxes be measured on the basis of ______ and ______ that have been enacted or substantively enacted by the balance sheet date."

varies from country to country

Select the best answer to complete the following statement: "IAS 12 requires that current and deferred taxes be measured on the basis of tax laws and rates that have been enacted or substantively enacted by the balance sheet date. However, the interpretation of substantively enacted ______."

does not mandate, how frequently, how soon

Select the best answer to complete the following statement: "IAS 34, Interim Financial Reporting, ______ which companies should prepare interim statements, ______, or ______ after the end of an interim period."

liabilities and assets

Select the best answer to complete the following statement: "IAS 37 provides guidance for reporting ______ of uncertain, timing, amount or existence.

liabilities and assets

Select the best answer to complete the following statement: "IAS 37 provides guidance for reporting ______ of uncertain, timing, amount or existence."

statement of cash flows, financial statements

Select the best answer to complete the following statement: "IAS 7 requires that a company must present a ______ as an integral part of its ______."

finance lease

Select the best answer to complete the following statement: "IFRS 16, Leases, requires lessees to account for all leases with the length of a year or more using the ______ model. Under this model, signing a lease agreement triggers balance sheet recognition of both a right-of-use asset, and a corresponding lease liability equal to the present value of future lease payments."

amortized cost, other comprehensive income

Select the best answer to complete the following statement: "IFRS 9's impairment rules apply to financial assets carried at ______ and debt securities classified as fair value through ______."

recognize at a minimum, the grant date

Select the best answer to complete the following statement: "If an entity modified the terms and conditions of a stock option, IFRS 2 requires the entity to ______ the original amount of compensation cost as measured at ______."

reduced, an increase, increased

Select the best answer to complete the following statement: "If the fair value of the options is ______ as the result of a modification, then there is no change in the total compensation cost to be recognized. If the modification results in ______ in the fair value of the options, then total compensation cost must be ______ by the difference between the fair value at the original grant date and the fair value at the modification date."

segregates, physical possession, physical inventory

Select the best answer to complete the following statement: "In a bill-and-hold sale, the seller ______ inventory meant for a customer but still maintains ______ of it. The seller bills the customer and records the sale as if the ______ has been delivered."

the debt component, the debt component, equity

Select the best answer to complete the following statement: "Regarding to choice-of-settlement share-based payment transactions, if the supplier of goods and services chooses to receive settlement in cash, the cash payment is applied against only ______. If the supplier chooses to receive settlement in equity, ______ is transferred to ______."

asset, expense, paid-in capital

Select the best answer to complete the following statement: "Share-based payment transactions entered into by an entity that will be settled by the entity issuing equity shares are accounted for as equity transactions. Typically, a debit is made to either a(n) ______ or a(n) ______, and a credit is made to ______."

hedge, hedge

Select the best answer to complete the following statement: "Under IFRS 9, whether the change in fair value over time is recognized in net income or other comprehensive income depends on whether the derivative is designated as a ______ or not, and if so, what kind of a ______."

(1) restates, (2) assets, liabilities and equity, (3) retrospective

Select the best answer to complete the following statement: "When it is impractical to determine the period-specific effects of an error on comparative information for one or more prior periods, the entity (1) ______ the opening balances in (2) ______ for the earliest period for which (3) ______ restatement is practicable.

equity transactions

Share-base payment transactions entered into by an entity that will be settled by the entity issuing equity shares are accounted for as ______.

8

The guidance for Operating segments can be found in IFRS ______.

a debit entry to compensation expense and a credit entry to paid-in capital

The journal entry to record compensation expense associated with equity-settled share-based payment usually includes ______.

1, 2, 3, 4, and 5

The standard's classification criteria that used by U.S accounts to distinguish operating and finance leases include: 1. The lease transfers ownership of the asset to the lessee by the end of the lease term. 2. The lessee has the option to purchase the asset at a price less than fair market value. 3. The lease term is for the major part of the leased asset's economic life. 4. The present value of minimum lease payments at the inception of the lease is equal to substantially all the fair value of the leased asset. 5. The leased asset is of a specialized nature such that only the lessee can use it without major modifications.

True

True or false: IAS 12 requires an explanation of the relationship between hypothetical tax expense based on statutory tax rates and reported tax expense based on the effective rate rate.

True

True or false: IAS 12 requires extensive disclosures to be made with regard to income taxes, including disclosure of the current and deferred components of tax expense.

True

True or false: IAS 12 requires recognition of a deferred tax asset if future realization of a tax benefit is probable, where "probable" is undefined.

False

True or false: IFRS 11 stipulates that award credits should be treated as a separately identifiable component of the sales transaction in which they are granted

False

True or false: In the case of equity instruments held for trading, IFRS 9 allows companies to make a one-time irrevocable election at initial recognition to classify the instruments as fair value through other comprehensive income to exclude future fair value gains and losses from the income statement.

False

True or false: The IASB published IAS 37 Part B to correct some errors found in the previous version of the standard.

True

True or false: The IASB published IAS 37 Part B to provide additional guidance and examples to demonstrate the application of the standard's recognition principles.

False

True or false: U.S. GAAP and IFRS provide a very similar definition of impairment.

True

True or false: Under U.S GAAP, a deferred tax asset must be recognized if its realization is more likely than not.

prospectively

A change in estimate due to new development or new information should be handled ______.

an onerous contract

A contract in which the unavoidable costs of meeting the obligation of the contract exceed the economic benefits expected to be received from it is called

restructuring

According to IAS 37, a(n) ______ is a program that is planned and controlled by management and that materially changes either the scope of a business undertaken by an entity or the manner in which that business is conducted."

Disclosed in a note

According to IAS 37, where are contingent assets reported when the inflow of economic benefits is probable?

As a liability

An entity issues preferred shares that are redeemable by the shareholders and the entity cannot avoid the payment of cash to shareholders if they redeem their shares. How should the preferred shares be classified?

$200,000

Chesapeake Corp. sold $2,000,000 merchandise to a customer in Salisbury. The gross margin is 30%. Chesapeake Corp. expects to have a 10% rate of returns. How much refund liability should Chesapeake recognize?

If material, then the decrease in value should be disclosed in the notes of the financial statements.

Choose the correct accounting treatment. Assume inventory carried at December 31, Year 1, balance sheet of $1,000 decreases in net realizable value to $500 due a to a change in the law of January 25th, Year 2. The financial statements are approved for issuance on February 1, Year 2. The decline in market value does not relate to the condition of the inventory at the balance sheet date.

$140,000

Duong Corp. sold $2,000,000 merchandise to a customer in El Paso, Texas. The gross margin of Duong Corp. is 30%. Duong Corp. expects to have 10% rate of returns. The journal entry to record the sale will include an entry to inventory returns asset of ______.

nonadjusting events

Events that are indicative of conditions that have arisen after the balance sheet date but before the date the financial statements are authorized for issuance are referred to as ______.

1, 2, 3, and 4

Examples of restructuring include: 1. The sale or termination of a line of business. 2. The closure of business locations in a country or region. 3. A change in management structure. 4. A fundamental reorganization that has a material effect on the nature and focus of the entity's operations.

a debit entry to Marketable Securities - FVOCI of $1,000

Exmore Corp. purchases marketable equity securities for $10,000 on September 10, Year 1. At the time of purchase, Exmore Corp. makes an FVOCI election for the investment. On December 31, Year 1, the securities have risen in value to $11,000. Exmore sells the securities on February 1, Year 2 for $14,000. The journal entry on December 31, Year 1 will include ______.

a credit entry to Deferred Revenue of $30,000

Fast Airways has a frequent-flyer awards program in which customers receive one point for each mile flown on Fast Airways flights. Frequent flyers can redeem 30,000 points for a free domestic flight, which on average, would otherwise cost $500. Reward points expire two years after they are awarded. Fast Airways expects that only 10% of points will expired unredeemed. During Year 1, Fast Airways awarded 2,000,000 points with the total ticket sales of $500,000. The journal entry to recognize revenue from ticket sales in Year 1 will include ______.

No journal entry

Former employees of AD Inc. file a lawsuit against the company in Year 1 for alleged age discrimination. At December 31, Year 1, external legal counsel provides an opinion that it is 20 percent probable that the company will be found liable, which will result in a total payment of $1,000,000. A journal entry at December 31, Year 1 to recognize a provision will include:

A debit entry to Litigation Loss of $150,000

Former employees of JC Inc. file a lawsuit against the company in Year 1 for alleged race discrimination. At December 31, Year 1, external legal counsel provides an opinion that it is 70% probable that the company will be found liable, which will result in a total payment to the former employees of between $100,000 and $200,000, with all amounts in that range being equally likely. A journal entry at December 31, Year 1 to recognize a provision will include:

$60,000

Gittelman Corp. expects that it will probably have a net operating loss of $150,000. Gittelman Corp. decides to recognize a deferred tax asset related to the loss. The effective tax rate if 40%. How much is the deferred tax asset to be recognized?

Dividends paid

HKD Corporation has interest received of $100, interest paid of $900, dividends received of $50 and dividends paid of $350. Under U.S GAAP, which activity should be classified as a financing activity?

Dividends paid are classified as a financing activity, the other activities are classified as operating activities.

HKD Corporation has interest received of $100, interest paid of $900, dividends received of $50 and dividends paid of $350. Under U.S. GAAP, what are the classifications of these activities?

a debit entry of $2,500 to Compensation Expense

HKD company grants 1,000 options on January 1, Year 1 to its employees. The employees can choose to settle the options either in shares of stocks or in cash equal to the intrinsic value of the options on the vesting date December 31, Year 2. At December 31, Year 1, the intrinsic value of each option is $5. The journal entry to record Year 1 compensation expense would include

a debit entry of $2,500 to Compensation Expense

HKD company grants 1,000 options on January 1, Year 1 to its employees. The employees can choose to settle the options either in shares of stocks or in cash equal to the intrinsic value of the options on the vesting date December 31, Year 2. At December 31, Year 1, the intrinsic value of each option is $5. The journal entry to record Year 1 compensation expense would include ______.

As liability

How are cash-settled share-based payment transactions classified under IFRS?

As equity

How are cash-settled share-based payment transactions classified under U.S. GAAP?

At the fair value of the equity instruments granted

How are share-based payments to employees measured?

At the fair value of the goods or services received

How are share-based payments to nonemployees measured?

At fair value

How does IFRS 9 requires derivatives to be measured?

short-term and noncurrent

IAS 1, Presentation of Financial Statements, requires liabilities to be classified as ___.

5

IAS 8 provides guidance with respect to all of the following, except: 1. The selection of accounting policies. 2. Accounting for changes in accounting policies. 3. Dealing with changes in accounting estimates. 4. The correction of errors. 5. Dealing with the changes in management team.

identify the contract with a customer

IFRS 15 requires an entity to apply 5 steps in the recognition of revenue. The first step is to ______.

1, 2, 3, 4,, and 5

IFRS 15 requires an entity to apply 5 steps in the recognition of revenue. What is the correct order of the 5 steps? 1. Identify the contract with a customer. 2. Identify the separate performance obligations in the contract. 3. Determine the transaction price. 4. Allocate the transaction price to the separate performance obligations. 5. Recognize the revenue allocated to each performance obligation when the entity satisfies each performance obligation.

1, 2, and 3

IFRS 2, Share-Based Payment, sets out measurement principles and specific requirements for the types of share-based payment transactions. Which types of transactions are included? 1. Equity-settled share-based payment transactions 2. Cash-settled share-based payment transactions 3. Choice-of-settlement share-based payment transactions

(1) Amortized costs; (2) Financial assets at fair value through other comprehensive income; (3) Financial assets at fair value through profit or loss

IFRS 9 establishes three categories for financial assets. The three categories include ______.

(1) Financial liabilities at fair value through profit or loss; (2) Financial liabilities measured at amortized cost

IFRS 9 establishes two categories for financial liabilities. The two categories include ______.

retrospectively

If practical, the change in accounting policy should be applied ______.

The date the entity obtains the goods or services

If the fair value of the equity instruments issued to nonemployees is used, what is the measurement date?

the sale is a borrowing secured by the accounts receivable

In sales of receivables, the receivables are not removed from the accounting records if ______.

the sale is truly a sale of an asset

In sales of receivables, the receivables are removed from the accounting records if ______.

Either 1 or 2

In which condition(s) is a change in accounting policy allowed? 1. If the change is required by IFRS 2. If the change results in financial statements that provide more relevant and reliable information.

$180,000

Kang Corp. stock options with a fair value of $300,000 to its employees at the beginning of Year 1. 20% of those options vest at the end of year 1, and 80% vest at the end of Year 2. Under IFRS, how much compensation expense should Kang Corp. recognize in Year 1?

a debit entry to Expense of $50

Maria Company transfers $500 of its receivables to a bank without recourse for $450. Assume that this is a pass-through arrangement and Maria Company meets the criteria required for derecognition of receivables. The journal entry to derecognize the receivables will include ______.

(1) carrying value or (2) fair value less costs to sell

Noncurrent assets held for sale must be reported separately on the balance sheet at the lower of ______.

$130,000

On January 1, Year 1, Johnathan Corp issued $2,000,000 of 5% bonds at face value. The bonds pay interest annually and mature on December 31, Year 2. How much is the interest expense recorded on December 31, Year 1 if the effective interest rate calculated as the internal rate of return is 6.5%?

A debit entry to Equipment-leasehold of $26,033

On January 1, Year 1, Lolita Company signs a 2-year lease contract for a new equipment with a useful life of 20 years. If Lolita had purchased the equipment, it would have had to pay $150,000. The contract obligates Lolita to make annual lease payment of $15,000 on December 31. Assume the present value of the lease payments to which Lolita is committed is $26,033. Using financial lease method under IFRS 16, what should be included in the journal entry on January 1, Year 1?

A debit entry to Equipment-leasehold of $17,355

On January 1, Year 1, Mesita Company signs a 2-year lease contract for a new equipment with a useful life of 20 years. If Mesita had purchased the equipment, it would have had to pay $100,000. The contract obligates Mesita to make annual lease payment of $10,000 on December 31. Assume the present value of the lease payments to which Mesita is committed is $17,355. Using financial lease method under IFRS 16, what should be included in the journal entry on January 1, Year 1?

111,600

On January 1, Year 1, Minh Corp issued $2,000,000 of 5% bonds at face value. The bonds pay interest annually and mature on December 31, year 2. The company paid $140,000 legal fees for the bond issuance. How much is the interest expense recorded on December 31, year 1 if the effective interest rate, calculated as the internal rate of return, is 6%?

As a current liability

On June 30, Year 1, Jeanne Inc. obtains a loan from a bank. The loan is due within 3 years and subject to a number of covenants. Jeanne Inc violates a covenant as of December 31, Year 1. As a result of the violation, the loan becomes due within 30 days. Jeanne Inc. asks the bank to waive the violation and the bank agrees to waive the violation on January 15, Year 2. The bank also states that the violation must be rectified within 12 months. Jeanne issues its financial statements on January 31, Year 2. How would Jeanne Inc. classify this loan on its balance sheet?

possible, past

Select the best answer to complete the following statement: "Contingent liabilities are defined in IAS 37 as ______ obligations that arise from ______ events and whose existence will be confirmed by the occurrence or nonoccurrence of a future event."

As a current liability

On June 30, Year 1, Jenny Inc. obtains a loan from a bank. The loan is due withing 3 years and subject to a number of debt covenants. Jenny violates a covenant as of September 15, Year 1 because it does not maintain a required current ratio. As the result of the violation, the loan become due within 30 days. On November 15, Year 1, Jenny has asked and the bank agrees to waive the violation, stipulating that the violation must be rectified within 2 months. How would Jenny Inc. classify this loan on its balance sheet dated December 31, Year 1?

a credit entry to Redeemable Preferred Shares Liability of $200,000

On October 15, Year 1, Camden Company issues $200,000 of 5% preferred shares at par value. The preferred shareholders have the right to force the company to redeem the shares at par value if the Federal Reserve Bank interest rate rises above 5%. Under IFRS, the journal entry to record the issuance of the shares on October 15, Year 1 will include ______.

a credit entry to Redeemable Preferred Shares Liability of $1,000,000

On October 29, Year 1, Pocomoke Company issues $1,000,000 of 4% preferred shares at par value. The preferred shareholders have the right to force the company to redeem the shares at par value if the Federal Reserve Bank interest rate rises above 4%. Under IFRS, the journal entry to record the issuance of the shares on October 29, Year 1 will include ______.

a credit entry to Cash of $10,000

Only Corp. purchases marketable equity securities for $10,000 on September 10, Year 1. At the time of purchase, Only Corp. makes an FVOCI election for the investment. On December 31, Year 1, the securities have risen in value to $11,000. Only Corp. sells the securities on February 1, Year 2, for $14,000. The journal entry on September 10, Year 1 will include ______.

1, 2, 3, and 4

Order the following into the correct hierarchy of authoritative pronouncements to be followed in selecting accounting policies required under IAS 8? 1. IASB Standard or Interpretation that specifically applies to the transaction or event 2. IASB Standard or Interpretation that deals with similar and related issues 3. Definitions, recognitions criteria, and measurement concepts in the IASB Framework 4. Most recent pronouncements of other standard-setting bodies that use a similar conceptual framework to develop accounting standards

Only 1, 2 and 3

Petrocan Company applies criteria of IAS 37 to determine whether recognition of a provision is appropriate. Which conditions should be met to recognize a provision? 1. Present obligation as a result of a past obligating event 2. An outflow of resources embodying economic benefits in settlement is probable. 3. A reliable estimate of the obligation can be made. 4. The estimation of the obligation must be completed by a certified public accountant.

1, 2 and 3

Petrocan Company applies the criteria of IAS 37 to determine whether recognition of a provision is appropriate. Which conditions below should be met to recognize a provision? 1. Present obligation as a result of a past obligating event 2. An outflow of resources embodying economic benefits in settlement is probable. 3. A reliable estimate of the obligation can be made.

Every balance sheet date

Regarding choice-of-settlement share-based payment transactions, how often should an entity remeasure the debt component?

a debit entry to deferred tax asset of $45,000

Salisbury Corp. expects that it will probably have a net operating loss of $150,000. Salisbury Corp. decides to recognize a deferred tax asset related to the loss, and the effective tax rate is 30%. The journal entry to record the deferred tax asset will include ______.

$150,000

Salter Corp. grants stock option with a fair value $200,000 to its employees at the beginning of Year 1. 50% of those options vest at the end of Year 1 and 50% vest at the end of Year 2. Under IFRS, how much compensation expense should Salter Corp. recognize in Year 1?

a debit entry to Other Comprehensive Income of $150,000

Santiago Corp. purchases 5 percent bonds for $1,500,000 on July 1, Year 1. The bonds mature on June 30, Year 2 and pay interest once a year on June 30. Santiago meets the IFRS 9 business model test because it sells its debt securities infrequently. The fair value of the bonds appreciate to $1,650,000 on December 31, Year 1. Rather than hold them to maturity, Santiago sells the bonds for $1,650,000 on January 1, Year 2. Santiago closes its books annually on December 31. The journal entry to record the sale of the bonds on January 1, Year 2 will include ______.

a credit entry to Other Comprehensive Income of $300,000

Santiago Corp. purchases 5 percent bonds for $2,000,000 on January 1, Year 1. The bonds mature on December 31, Year 2. Santiago meets the IFRS 9 business model test because it sells its debt securities infrequently. On December 31, Year 1, the fair value of the bonds increases to $2.3 million. Rather than hold them to maturity, Santiago sells the bonds for $2.3 million on January 15, Year 2. Santiago closes its books annually. The journal entry on December 31, Year 1 include ______.

of the change, future periods, affected by

Select the best answer to complete the following statement: "A change in estimate due to new development or new information should be accounted for in the period ______ or in ______, depending on the periods ______ the change."

unavoidable, exceed

Select the best answer to complete the following statement: "According to IAS 37, an onerous contract is a contract in which the ______ costs of meeting the obligation of of the contract ______ the economic benefits expected to be received from it."

events, recognized

Select the best answer to complete the following statement: "Adjusting ______ must be ______ through adjustments of the financial statements."

assets and liabilities

Select the best answer to complete the following statement: "Although ASC 842 preserves the distinction between operating and finance leases, it has similar effect to that of IFRS 16 by requiring lease ______ to be recorded for both operating and finance leases."

differences, difference, different

Select the best answer to complete the following statement: "Because of the ______ in impairment definition, the amount of the temporary tax ______ related to the impairment loss in a set of IFRS-based financial statements will be ______ from the amount recognized under U.S. GAAP."

detailed guidance

Select the best answer to complete the following statement: "Compared to IFRS, U.S GAAP provides more ______ with respect to the calculation of diluted earnings per share."

2

U.S. GAAP differs than IFRS in the presentation of the statement of cash flows in all of the following, except: 1. Interest paid, interest received, and dividends received are all classified as operating cash flows. 2. Dividends paid are classified as operating cash flows. 3. When using the indirect method of presenting operating cash flows, the reconciliation from income to cash flows must begin with net income. 4. When using the direct method of presenting operating cash flows, a reconciliation from net income to operating cash flows also must be presented. 5. The cash and cash equivalents line item in the statement of cash flows must reconcile with the cash and cash equivalents line in the statement of financial position.

2

U.S. GAAP differs than IFRS in the presentation of the statement of cash flows in all of the following, except: 1. Interest paid, interest received, and dividends received are all classified as operating cash flows. Dividends paid are classified as financing cash flows. 2. When using the indirect method of presenting operating cash flows, the reconciliation from income to cash flows must begin with cash and cash equivalents. 3. when using the direct method of presenting operating cash flows, a reconciliation from net income to operating cash flows also must be presented. 4. The cash and cash equivalents line item in the statement of cash flows must reconcile with the cash and cash equivalents line in the statement of financial position.

1, 2, or 3

Under IAS 32, a financial asset is defined as: 1. Cash. 2. A contractual right to receive cash or another asset or to exchange financial assets or financial liabilities under potentially favorable conditions. 3. An equity instrument of another entity.

As a liability

Under IAS 32, if an equity instrument contains a contractual obligation that meets the definition of a financial liability, how should it be classified?

their fair value

Under IFRS 15, the amount allocated to the award credits related to customer loyalty is estimated at ______.

A compound financial instrument

Under IFRS, what is a financial instrument that contains both a liability element and an equity element?

Those that provide evidence of conditions that existed at the end of the reporting period

What are adjusting events?

Either 1 or 2

What are contingent liabilities defined in IAS 37? 1. Possible obligations that arise from past events and whose existence will be confirmed by the occurrence or nonoccurrence of a future event. 2. A present obligation that is not recognized because (a) it is not probable that an outflow of resources will be required to settle the obligation or (b) the amount of the obligation cannot be measured with sufficient reliability.

1, 2, and 3

What are the criteria required for derecognition of receivables? 1. The company is under no obligation to pay any more than it collects. 2. It may not pledge or resell the receivables. 3. It has agreed to remit the money collected in a timely manner.

Financial assets carried at amortized cost and debt securities classified as fair value through other comprehensive income

What do the IFRS 9's impairment rules apply to

Financial assets carried at amortized cost and debt securities classified as fair value through other comprehensive income

What do the IFRS 9's impairment rules apply to?

Only as noncurrent asset or liability

What does IAS 1 require deferred taxes to be classified as?

Current or noncurrent based on the classification of the related asset or liability

What does U.S. GAAP require deferred tax assets and liabilities to be classified as?

The accounting treatment for a compound financial instrument that is split into two components that are reported separately

What is "split accounting"?

A sale in which the seller segregates inventory meant for a customer but still maintains physical possession of it

What is a bill-and-hold sale?

The revenue from customers' tendency to overlook their rights to redeem loyalty points or gift card balances

What is a breakage revenue?

A component of an entity that represents a major line of business or geographical area of operations that either has been disposed of or has been classified as held for sale

What is a discontinued operation?

A contract A contract that gives rise to both a financial asset of one entity and a financial liability or equity instrument of another entitythat gives rise to both a financial asset of one entity and a financial liability or equity instrument of another entity

What is a financial instrument defined under IAS 32?

Stock options that vest on a single date

What is cliff vesting?

Subsequent events

What is the equivalence of "Events after the reporting period" in U.S GAAP?

IASB Standard or Interpretation that specifically applies to the transaction or event

What is the first authoritative pronouncement in the hierarchy to be followed in selecting accounting policies required under IAS 8?

If one party has the ability to control or exert significant influence over the other party

When are parties considered related parties?

2018

When did U.S. GAAP begin to require companies to include fair value gains and losses on equity holdings in the income statement?

Restate the opening balances in assets, liabilities and equity for the earliest period for which retrospective restatement is practicable.

When it is impractical to determine the period-specific effects of an error on comparative information for one or more prior periods, what should an entity do?

1, 2 and 3

When should a provision be recognized? 1. The entity has a present obligation (legal or constructive) as a result of a past event. 2. It is probable (more likely than not) that an outflow of resources embodying economic events will be required to settle obligation. 3. A reliable estimate of the obligation can be made. 4. The estimate of the obligation must be completed by a certified, professional, third-party.

2006

When was IFRS 8, Operating Segments, issued to replace IAS 14, Segment Reporting?

In the notes to financial statements

Where must transactions between related parties be disclosed?

IAS 12

Which IAS provides guidance about income taxes?

IAS 8

Which IAS provides guidance for Accounting policies, changes in accountings estimates and errors?

IAS 10

Which IAS provides guidance for Events after the reporting period?

IAS 34

Which IAS provides guidance for Interim Financial Reporting?

IAS 33

Which IAS provides guidance for calculating earnings per share?

7

Which IAS provides guidance for disclosure and presentation of the statement of cash flows?

IAS 37

Which IAS provides guidance for reporting liabilities (and assets) of uncertain timing, amount, or existence?

IAS 1

Which IAS provides guidance for the Presentation of Financial Statements?

IAS 32

Which IAS provides guidance for the presentation of financial instruments?

IFRS 16

Which IFRS provides guidance for leases?

IFRS 8

Which IFRS provides guidance for operating segments?

IFRS 7

Which IFRS provides guidance for the disclosure of financial instruments?

IFRS 2

Which IFRS provides guidance to share-based payment?

IFRS 9

Which IFRS replaces the recognition and measurement guidance formerly provided by IAS 39?

IFRS 8

Which standard replaces IAS 14, Segment Reporting?

Both IAS and U.S. GAAP

Which standards adopt an asset-and-liability approach that recognizes deferred tax assets and liabilities for temporary differences and for operating loss and tax credit carry forwards?

a credit entry to Additional Paid-in Capital of $42,080

Wicomico Company issued $1 million of 5% convertible bonds at par value. The bonds have 5-year life with interest payable annually. Each bond has a face value of $1,000 and is convertible at any time up to maturity into 100 shares of common stock. At the date of issue, the interest rate for similar debt without a conversion feature is 6%. The present value of $1 with n = 5, i = 6 is 0.7473. The present value of ordinary annuity of $1 with n = 5, i =6 is 4.2124. The journal entry to record the bond issuance will include ______.

$957,920

Wicomico Company issued $1 million of 5% convertible bonds at par value. The bonds have 5-year life with interest payable annually. Each bond has a face value of $1,000 and is convertible at any time up to maturity into 100 shares of common stock. At the date of issue, the interest rate for similar debt without a conversion feature is 6%. What is the fair value of the bonds? The present value of $1 with n = 5, i = 6 is 0.7473. The present value of the ordinary annuity of $1 with n = 5, i = 6% is 4.2124.

$150,000

Wicomico Corp has a foreign subsidiary. For the year ending December 31, Year 1, the foreign subsidiary's taxable income is $300,000. The tax rate paid in the foreign country on distributed profit is 45% and the rate on undistributed profits is 50%. The foreign subsidiary does not distribute any profit in Year 1. How much is the current tax expense in Year 1?

$7,500

Wicomico has a foreign subsidiary. For the year ending December 31, Year 1, the foreign subsidiary's taxable income is $300,000. The foreign subsidiary does not distribute any profit in Year 1. In Year 2, the foreign subsidiary distributes a dividend of $150,000. The tax rate paid in the foreign country on distributed profit is 45% and the rate on undistributed profits is 50%. How much is the tax credit receivable in Year 2?