Seatwork No. 2 (Finals) BSA 1E

During the period, Entity A reclassifies a building that was previously used as office space to investment property. Entity A uses the cost model for both investment property and PPE. Entity A will recognize a gain if the fair value of the asset exceeds its carrying amount on the date of transfer.

• True
• False

If the investment property becomes the subject of an operating lease, such investment property should be derecognized.

• True
• False

When an entity reclassifies a property into or out of investment property, it shall apply the existing standard applicable to that property until the date of transfer.

• True
• False

If the investment and owner-occupied portion of the property could not be sold or leased out separately, the property is investment property if only an insignificant portion is held for manufacturing or administrative purposes.

• True
• False

If an entity owns and manages a hotel, services provided to guests are a significant component of the arrangement as a whole. The hotel is classified as Investment Property.

• True
• False

Mango trees and other plants that produce agricultural products over a long period of time is within the scope of PAS 41.

• True
• False

When fair value cannot be determined reliably, the biological asset shall be measured at cost less accumulated depreciation and impairment losses.

• True
• False

Agricultural produce as it grows on bearer plants is measured at the end of each reporting period prior to harvest at fair value.

• True
• False

When agricultural produce is harvested, the harvest shall be accounted for as inventory. For such purpose, cost at the date of harvest is deemed to be fair value less cost of disposal at the point of harvest.

• True
• False

A gain or loss arising on the initial recognition of a biological asset and from a change in the fair value less cost of disposal of a biological asset shall be included in the profit loss for the period.

• True
• False