Module 3: Which of the following statements is true of IAS 19? Its revised version became effective in the year 2013. Under IAS 32, which of the following is a financial liability? All of the above - a payable, a bank loan, An intercompany loan payable Under IAS 38, which of the following items might qualify for capitalization as internally generated intangible assets? Market Share Sigma Company issued $12 million in 10 percent bonds 6 years ago currently having a carrying amount of $10.7 million. The bond agreement allows for early extinguishment by Sigma Company beginning in the current year. Sigma's investment bank has arranged for the company to issue $10 million of new 8 percent bonds at face value to a group of investors. The proceeds will be used to extinguish the 10 percent bonds. The banking, legal, and accounting costs to execute the transaction total $200,000. The journal entry to record the debt extinguishment will include: a credit to Gain on Extinguishment of 10% Bonds for $500,000. According to IAS 37, how should contingent assets be recognized? They should be disclosed in the notes to the financial statements if the inflow of resources is probably. A company determined the following values for its inventory as of the end of its fiscal year:
Historical cost$50,000 Current replacement cost35,000 Net realizable value45,000 Net realizable value less a normal profit margin40,000 Fair value48,000 What amount should the company report for inventory on its balance sheet? $45,000 Under IAS 39, Financial Instruments, which of the following terms describes the removal of a financial asset or liability from the balance sheet when certain appropriate criteria have been met? Derecognition Under U.S. GAAP, if the carrying value of a fixed asset was $50,000, the undiscounted expected future cash flows was $55,000, the discounted expected future cash flows was $51,000, and the selling price was $53,000, what is the amount of impairment loss? $0 The following inventory information was taken from the records of GlobeKom Ltd.: Historical cost$12,000
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Replacement cost$9,000 Expected selling Price$10,000 Expected selling cost$500 Normal profit margin10% of selling price Under U.S. GAAP, what should the balance sheet report for Inventory? $9500 Changsha Corporation purchased an asset during the fourth quarter of the current fiscal year. It is now the end of the fiscal year, and the asset's fair value exceeds its historical cost. In certain circumstances, IFRS allows or requires Changsha to carry the asset at fair value in its year-end balance sheet. In which of the following scenarios might Changsha carry the asset at fair value? I.The asset is a new home office that Changsha occupied immediately after the purchase. II.The asset is a broadcasting license with an indefinite useful life. III.The asset is an office park that is being rented to a tenant. IV.The asset is 100 hectares of young trees that will eventually be turned into wood products. V.The asset is a vineyard consisting of mature grapevines. Scenarios I, III, IV, and V. Blanco Chemical Company spent €15,000,000 in development efforts to create a fertilizer for which it was able to obtain a patent; however, the expected distribution costs make it infeasible to market the chemical in the foreseeable future. According to IAS 38 (Intangible Assets), how should Blanco Chemical Company record the €15,000,000?
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