WorksheetsPFRS 9
Total questions: 89
Worksheet time: 1hrs 29mins
Name
Class
Date
1.
Any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
a)
Financial asset
b)
Financial liability
c)
Financial instrument
2.
Which of the following are exceptions for IFRS 9 application?
a)
Contracts to buy or sell a non-financial item that can be settled net in cash or another financial instrument as if the contracts were financial instruments
b)
Derivatives that are embedded in leases
c)
Contracts that were entered into and continue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with the entity’s expected purchase, sale or usage requirements
3.
Which of the following loan commitments are within the scope of IFRS 9?
a)
Loan commitments that the entity designates as financial liabilities at fair value through profit or loss
b)
Loan commitments that can be settled net in cash or by delivering or issuing another financial instrument
c)
Commitments to provide a loan at a below-market interest rate
d)
All of these
4.
When an entity transfers a financial asset, it shall evaluate the extent to which it retains __________ the financial asset.
a)
The rights and obligations of ownership
b)
Control over
c)
The risks and rewards of ownership
d)
Significant influence
5.
When an entity continues to recognise an asset to the extent of its continuing involvement, the entity shall not recognise an associated liability.
a)
True
b)
False
6.
Any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
a)
Equity Instrument
b)
Financial Instrument
7.
A contract that will or may be settled in the entity’s own equity instruments and is a non-derivative for which the entity is or may be obliged to deliver a variable number of the entity’s own equity instruments, is a financial asset.
a)
True
b)
False
8.
Contracts, and thus financial instruments, may take a variety of forms and need not be in writing.
a)
True
b)
False
9.
An entity shall recognize a financial asset or a financial liability in its statement of financial position when, and only when, the entity becomes party to the contractual provisions of the instrument.
a)
True
b)
False
10.
When should an entity derecognize a financial asset?
a)
the contractual rights to the cash flows from the financial asset expire
b)
it transfers the financial asset and the transfer qualifies for derecognition rules.
11.
When an entity transfers the contractual rights to receive the cash flows of the financial asset, such transaction is
a)
a transfer of financial asset
b)
not yet a transfer of financial asset
12.
When an entity retains the contractual rights to receive the cash flows of the financial asset but assumes a contractual obligation to pay the cash flows to one or more recipients, such transaction shall not be treated as a transfer of financial asset.
a)
True
b)
False
13.
When entity transfers substantially all the risks and rewards of ownership of the financial asset, the entity shall continue to use the assets.
a)
True
b)
False
14.
When an entity retains substantially all the risks and rewards of ownership of the financial asset, the entity shall
a)
derecognize the financial asset
b)
continue to recognize the financial asset
c)
transfer the financial asset
15.
If the entity neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, the entity shall determine whether it has retained control of the financial asset.
a)
True
b)
False
16.
If the entity no longer has retained control over the financial asset, it shall
a)
continue to recognize the financial asset to the extent of its continuing involvement in the financial asset
b)
derecognize the financial asset and recognize separately as assets or liabilities any rights and obligations created or retained in the transfer
17.
Even if the entity has not retained control over the financial asset, it may still have retained some rights and obligations created in the transfer of the asset.
a)
True
b)
False
18.
An entity shall derecognize a financial liability from its statement of financial position when the obligation specified in the contract is discharged or cancelled or expires.
a)
True
b)
False
19.
An exchange between an existing borrower and lender of debt instruments with substantially different terms shall
a)
not be accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability
b)
be accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability
20.
When a debtor discharges a financial liability by paying the creditor, normally with cash, other financial assets, goods or services; the financial liability is said to be extinguished.
a)
True
b)
False
21.
A substantial modification of the terms of an existing financial liability or a part of it shall be accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability, unless such modification is not attributable to the financial difficulty of the debtor.
a)
True
b)
False
22.
When the debtor is legally released from primary responsibility for the liability, either by process of law or by the creditor, the financial liability must be extinguished.
a)
True
b)
False
23.
The extinguishement of a financial liability means that the obligation specified in the contract is discharged, cancelled or expires.
a)
True
b)
False
24.
The difference between the carrying amount of a financial liability and the consideration paid shall be recognized in _____, when and only when _____.
a)
Other comprehensive income ; the financial liability has not been transferred nor considered to be extinguished.
b)
Profit or Loss ; the financial liability is extinguished or transferred to another party.
25.
The consideration paid to be deducted over the carrying amount of an extinguished financial liability includes non‐cash assets transferred and any liabilities assumed.
a)
True
b)
False
26.
A person or a company who owes money is called as “debtor”, if the debt is in the form of a loan from a financial institution; otherwise is referred to as a “borrower”,if the debt is in the form of securities such as bonds.
a)
True
b)
False
27.
If an issuer of a debt instrument repurchases the instrument, the debt is extinguished even if the issuer is a market maker in that instrument or intends to resell it in the near term.
a)
True
b)
False
28.
Payment to a third party, including a trust, by itself, does not, relieve the debtor of its primary obligation to the creditor, unless there is a legal release.
a)
True
b)
False
29.
If a debtor pays a third party to assume an obligation and notifies its creditor that the third party has assumed its debt obligation,
a)
the debtor does not derecognise the debt obligation unless it obtains a legal release from its creditor
b)
the debtor derecognizes the debt obligation unless the financial liability is extinguished
30.
The debtor recognizes a new debt obligation to the third party,
a)
if the debtor disagrees to make payments on the debt to the third party or direct to its original creditor.
b)
if the debtor agrees to make payments on the debt to the third party or direct to its original creditor.
31.
Although legal release, whether judicially or by the creditor, results in derecognition of a liability, the entity may recognise a new liability if the derecognition criteria for the financial assets transferred are not entirely met.
a)
True
b)
False
32.
The terms of a financial liability are said to be substantially different if the discounted present value of the cash flows under the new terms, is at least 10 per cent different from the discounted present value of the remaining cash flows of the original financial liability.
a)
True
b)
False
33.
If an exchange of debt instruments or modification of terms is accounted for as an extinguishment,
a)
any costs or fees incurred are recognised as part of the gain or loss on the extinguishment.
b)
any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability
34.
If an exchange of debt instruments or modification of terms is not accounted for as an extinguishment,
a)
any costs or fees incurred are recognised as part of the gain or loss on the extinguishment.
b)
any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability
35.
If an exchange of debt instruments or modification of terms is not accounted for as an extinguishment,
a)
any costs or fees incurred are recognised as part of the gain or loss on the extinguishment.
b)
any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability
36.
At initial recognition, an entity may irrevocably designate a financial asset as measured at fair value through profit or loss if doing so eliminates or significantly reduces any measurement or recognition inconsistencies.
a)
True
b)
False
37.
A financial asset is initially measured
a)
at fair value plus transaction costs unless it is carried at fair value through profit or loss.
b)
at fair value minus transaction costs unless it is carried at fair value through profit or loss.
38.
Transactions costs are immediately expensed if a financial asset is initially
a)
carried at FVPL
b)
carried at amortized cost
c)
carried at FVOCI
39.
The following are the basis of subsequent measurement of the financial assets, except
a)
the entity’s business model for managing the financial assets
b)
the contractual cash flow characteristics of the financial asset
c)
none of these is exempt from the subsequent measurement basis of financial assets
40.
When the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and, where the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, the financial assets shall be measured at
a)
FVOCI
b)
amortized cost
c)
FVPL
41.
When the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and, the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, the financial assets shall be measured at
a)
FVOCI
b)
amortized cost
c)
FVPL
42.
Financial liabilities initially carried at FVPL shall not be subsequently measured at amortized cost.
a)
True
b)
False
43.
Financial liabilities arising from the transfer of a financial asset not qualified for derecognition may be measured subsequently at amortized cost.
a)
True
b)
False
44.
Financial Guarantee Contracts shall not be measured subsequently at amortized cost.
a)
True
b)
False
45.
Commitments to provide a loan below-market interest rate can be measured subsequently at amortized cost.
a)
True
b)
False
46.
Contingent considerations recognized by an acquirer in a business combination shall not be subsequently measured at amortized cost.
a)
True
b)
False
47.
At initial recognition, an entity may irrevocably designate a financial liability as measured at fair value through profit or loss when permitted, or when doing so results in more relevant information,
a)
True
b)
False
48.
Any financial liability shall not be reclassified
a)
True
b)
False
49.
When, and only when, an entity changes its business model for managing financial assets it shall reclassify all affected financial assets.
a)
True
b)
False
50.
If an entity reclassifies financial assets, it shall apply the reclassification
a)
prospectively from the reclassification date
b)
retrospectively from the reclassification date
51.
Any previously recognized gains or losses, including impairment gains or losses, or interest, in respect of financial assets,
a)
shall be restated
b)
shall not be restated
52.
When reclassifying a financial asset from Amortized Cost to Fair Value through Profit or Loss, the financial asset’s fair value is measured at the _____ date; and any gain or loss arising from a difference between the previous amortized cost of the financial asset and fair value is recognized in _____.
a)
reclassification ; profit or loss
b)
reclassification ; other comprehensive income
53.
When fair value of the financial asset at the reclassification date becomes its new gross carrying amount, the described reclassification of the financial asset is
a)
Amortized Cost to FVPL
b)
Fair value through profit or loss to Amortized Cost
c)
Fair value through other comprehensive income to Amortized Cost
d)
Amortized cost to FVOCI
54.
Any gain or loss arising from the difference between the previous amortized cost of the financial asset and fair value is recognized in other comprehensive income. The effective interest rate and the measurement of expected credit losses are not adjusted as a result of the reclassification.
a)
Amortized Cost to FVPL
b)
Fair value through profit or loss to Amortized Cost
c)
Fair value through other comprehensive income to Amortized Cost
d)
Amortized cost to FVOCI
55.
The financial asset is measured at the reclassification date as if it had always been measured at amortized cost. Consequently, the effective interest rate and the measurement of expected credit losses are not adjusted as a result of the reclassification.
a)
Amortized Cost to FVPL
b)
Fair value through profit or loss to Amortized Cost
c)
Fair value through other comprehensive income to Amortized Cost
d)
Amortized cost to FVOCI
56.
The financial asset continues to be measured at fair value.
a)
FVPL to FVOCI
b)
FVPL to Amortized Cost
c)
FVOCI to Amortized Cost
d)
Amortized cost to FVOCI
57.
The financial asset continues to be measured at fair value. The cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment at the reclassification date.
a)
FVPL to FVOCI
b)
FVPL to Amortized Cost
c)
FVOCI to Amortized Cost
d)
FVOCI to FVPL
58.
At initial recognition, an entity shall measure a financial asset or financial liability at its fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability, and for trade receivables.
a)
True
b)
False
59.
If the fair value of the financial asset or financial liability at initial recognition differs from the transaction price, an entity shall recognize the asset initially at its fair value on the trade date. An entity shall measure trade receivables at their transaction price if the trade receivables do not contain a significant financing component.
a)
True
b)
False
60.
An entity shall apply the impairment requirements only to financial assets that are measured at amortized cost and to financial assets that are measured at fair value through other comprehensive income.
a)
True
b)
False
61.
Generally, the subsequent measurements for financial liabilities is at amortized cost, while financial liabilities that are initially measured at FVPL is at fair value.
a)
True
b)
False
62.
When the contractual cash flows of a financial asset are renegotiated or otherwise modified and the renegotiation or modification does not result in the derecognition of that financial asset in accordance with this Standard, an entity shall recalculate the gross carrying amount of the financial asset and shall recognize a modification gain or loss in profit or loss.
a)
True
b)
False
63.
Any costs or fees incurred adjust the carrying amount of the modified financial asset and are amortized over the remaining term of the modified financial asset.
a)
True
b)
False
64.
A write-off does not constitute a derecognition event.
a)
True
b)
False
65.
When entity has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof, it shall directly reduce the gross carrying amount of a financial asset .
a)
True
b)
False
66.
At each reporting date, an entity shall assess whether the credit risk on a financial instrument has increased significantly since initial recognition.
a)
True
b)
False
67.
At each reporting date, an entity shall assess whether the credit risk on a financial instrument has increased significantly since initial recognition.
a)
True
b)
False
68.
A loss allowance is recognized for expected credit losses on a financial assets at FVOCI.
a)
True
b)
False
69.
An entity shall recognize a loss allowance for expected credit losses on a financial assets at fair value through OCI, financial assets at amortized cost, a lease receivable, a contract asset or a loan commitment and a financial guarantee contract to which the impairment requirements apply.
a)
True
b)
False
70.
At each reporting date, an entity shall measure the loss allowance for a financial instrument at an amount _____ to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition.
a)
equal
b)
higher
c)
lower
71.
At each reporting date, an entity shall measure the loss allowance for a financial instrument at an amount equal to the _____ if the credit risk on that financial instrument has increased significantly since initial recognition.
a)
lifetime expected credit losses
b)
12-month expected credit losses
72.
At each reporting date, an entity shall measure the loss allowance for a financial instrument at an amount equal to the _____ if the credit risk on that financial instrument has not increased significantly since initial recognition.
a)
lifetime expected credit losses
b)
12-month expected credit losses
73.
An entity may assume that the credit risk on a financial instrument has not increased significantly since initial recognition if the financial instrument is determined to have low credit risk at the reporting date.
a)
True
b)
False
74.
An entity shall recognize the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized, in the ____ as a ____.
a)
OCI ; gain or loss
b)
P/L ; gain or loss
75.
An entity shall measure expected credit losses of a financial instrument in a way that reflects
a)
an unbiased and probability‐weighted amount that is determined by evaluating a range of possible outcomes
b)
the time value of money
c)
reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions
76.
A gain or loss on a financial asset or financial liability that is measured at fair value shall be recognized in profit or loss.
a)
True
b)
False
77.
The gains or loss from a hedging financial instrument shall be presented in profit or loss.
a)
True
b)
False
78.
Dividends can only be recognized in profit or loss only when the entity’s right to receive payment of the dividend is established, when it is probable that the economic benefits associated with the dividend will flow to the entity, and the amount of the dividend can be measured reliably.
a)
True
b)
False
79.
A gain or loss on a financial liability that is measured at amortized cost and is not part of a hedging relationship shall be recognized in profit or loss when the financial liability is derecognized and through the amortization process.
a)
True
b)
False
80.
An entity shall present a gain or loss on a financial liability that is designated as at fair value through profit or loss the following
a)
the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability shall be presented in other comprehensive income
b)
the remaining amount of change in the fair value of the liability shall be presented in profit or loss
81.
A gain or loss on a financial asset measured at fair value through other comprehensive income shall be recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.
a)
True
b)
False
82.
The issuer of a non‐derivative financial instrument shall evaluate the terms of the financial instrument to determine whether it contains both a liability and an equity component. Such components shall be classified separately as financial liabilities, financial assets or equity instruments.
a)
True
b)
False
83.
If an entity reacquires its own equity instruments, those treasury shares shall be deducted from equity.
a)
True
b)
False
84.
When an entity currently has a legally enforceable right to set off the recognized amounts, and it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously, its financial asset an financial liability shall be offset; and the net amount is presented in the statement of financial position.
a)
True
b)
False
85.
An entity shall directly reduce the gross carrying amount of a financial asset when the entity has reasonable expectations of recovering a financial asset in its entirety or a portion thereof.
a)
True
b)
False
86.
An entity shall apply the impairment requirements to financial assets that are measured at fair value through profit or loss.
a)
True
b)
False
87.
Dividends received from an investee reduce the carrying amount of the investment.
a)
True
b)
False
88.
Held for trading financial assets shall be initially classified at fair value through profit or loss unless irrevocably designated at fair value through OCI.
a)
True
b)
False
89.
Investment is equity securities cannot be designated as financial assets at amortized cost because cash flows resulting from said securities cannot pass the contractual cash flow test.
a)
True
b)
False
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