Reclass and Investment Property Review

Reclassifications of investments between categories are accounted for

• Prospectively, at the end of the period after the change in the business model.

• Prospectively, at the beginning of the period after the change in the business model.

• Retrospectively, at the end of the period after the change in the business model.

• Retrospectively, at the beginning of the period after the change the business model.

When a debt investment at amortized cost is reclassified to FVPL, the difference between the previous carrying amount and fair value at reclassification date is

• Recognized in profit or loss.

• Not recognized

• Recognized in other comprehensive income

• included in retained earnings

When a debt investment at FVPL is reclassified to amortized cost, what is the new carrying amount at amortized cost?

• Fair value at reclassification date

• Face amount of the debt investment

• Present value of the contractual cash flows

• Original carrying amount of the debt investment

Which statement is true when a debt investment at amortized cost is reclassified to FVOCI?

• The debt investment is measured at fair value at reclassification date.

• The difference between the previous carrying amount and fair value at reclassification date is recognized in other comprehensive income.

• The original effective rate is not adjusted.

• All of these statements are true.

Which statement is true when a debt investment at FVOCI is reclassified to amortized cost?

• The fair value at reclassification date becomes the new carrying amount.

• The cumulative gain or loss previously recognized in OCI is removed from equity and adjusted against the fair value at reclassification date.

• The original effective rate is not adjusted

• All of these statements are true.

When a financial asset at FVPL is reclassified to FVOCI, the new carrying amount is equal to

• Fair value at reclassification date

• Original carrying amount

• Present value of contractual cash flows

• Present value of contractual cash flows representing principal

1. Which is considered an investment property?

• Building held for lease under an operating lease

• Building under construction

• Building held for sale in the normal course of business

• Building used in business

An entity has investment property that is held to earn rental income. The entity uses fair value model for reporting the investment property. Which statement is true?

• Changes in fair value are recognized in profit or loss of the current period.

• Changes in fair value are reported as an extra ordinary gain in the period

• Changes in fair value are reported as component of other comprehensive income for the period

• Changes in fair value are reported as deferred revenue for the period

An entity has investment property and uses fair value model. Which of the following statements is true?

• The entity should measure the investment property at cost less accumulated depreciation and less accumulated impairment losses

• The entity should report the increase in fair value in other comprehensive income for the period

• The entity should depreciate the investment property using normal depreciation policy

• The entity does not record depreciation on the investment

An entity purchased land for future use and appropriately classified the land as investment property. What measurement model may be used to report the land?

• Fair value model or revaluation model

• Revaluation model

• Cost model or fair value model

• Cost model or revaluation model