WorksheetsFAIR&LEASES
Total questions: 25
Worksheet time: 13mins
Fair value of an asset should be based upon
. The price that would be received to sell the asset at the measurement date.
The replacement cost of an asset
The original cost of the asset.
The price that would be paid to acquire the asset
Which describes a principal market for an asset?
Any broker or dealer market.
The market that has the greatest volume and level of activity for the asset
The most observable market
The market that maximizes the amount received
Which is true for measuring an asset at fair value?
The fair value of the asset should be adjusted for cost of disposal.
The price of the asset should be adjusted for transaction cost.
The fair value is based upon an entry price.
The price should be adjusted for cost to transport the asset to the principal market if location is a characteristic of the asset.
The fair value of the asset should be adjusted for cost of disposal.
The asset must be in-use
The asset must be considered in-exchange
The most conservative estimate must be used
asset is in the highest and best use
Which of the following would meet the qualifications as market participants?
A subsidiary of the reporting unit interested in purchasing assets similar to those being valued.
A liquidation market in which sellers are compelled to sell.
An independent entity that is knowledgeable about the asset.
A broker or dealer that wishes to establish new market for the asset.
The fair value at initial recognition is
The price paid to acquire the asset.
The price paid to acquire the asset less transaction cost.
The price paid to transfer or sell the asset.
Which of the following is not a valuation technique used in fair value measurement?
Income approach
Residual value approach
Market approach
Cost approach
Valuation techniques for fair value that include the Black-Scholes formula, a binomial model, or discounted cash flow are examples of which valuation technique?
Income approach
Market approach
Cost approach
Exit value approach
What is the market approach for measuring fair value?
Present value of future cash flows
The price to replace the service capacity of the asset
Prices and other relevant information of transactions from identical or comparable assets
The average of the present value of future cash flows
Which of the following would be considered a Level 2 input for fair value measurement?
Quoted market price on a stock exchange for an identical asset
Quoted market price available from a business broker for a similar asset
Historical performance and return on the investment
Discounted cash flows
Under IFRS, a lessee is required to recognize
Right of use asset but not lease liability
Right of use asset and lease liability
Lease liability but not right of use asset
Neither right of use asset nor lease liability
The lessee may apply the operating lease model under what condition?
Short-term lease
Low value lease
Both short-term lease and low value lease
Under all circumstances
A short-term lease is defined as
Twelve months or less
Six months or less
Twelve-month lease with a purchase option
Two-year lease with option to terminate
Which statement is true about low value lease?
The value of an underlying asset is based on the value of the asset when new regardless of the age of the asset.
The term of a low value lease may be more than twelve months
An underlying asset does not qualify as low value lease if the nature of the asset is such that the asset is typically not of low value when new.
All of these statements are true about low value lease.
A right of use asset is initially measured at
Fair value
Cost
Current cost
Present value of expected cash inflows
The cost of right of use asset comprises all, except
Lease payment made to lessor on or before commencement date
The present value of lease payments
Initial direct cost incurred by lessee
Estimated cost of dismantling the underlying asset for which the lessee has no present obligation
The right of use asset is reported as
Noncurrent as separate line stem
Property, plant and equipment
Intangible asset
Investment property
A lessee with a lease containing a purchase option that is reasonably certain to be exercised should depreciate the right of use asset over
Useful life of the asset
Lease term
Useful life of the asset or the lease term, whichever is shorter
Useful life of the asset or the lease term, whichever is longer
A lease liability is measured at
The absolute amount of lease payments
The present value of lease payments
The present value of fixed lease payments
The fair value of the underlying asset
The lease payments include all of the following, except
Variable lease payments
Fixed lease payments
Leasehold improvement
Residual value guarantee of the lessee
Rent received in advance by the lessor in an operating lease should be recognized as revenue
When received
At the lease inception
At the lease expiration
In the period specified by the lease
When should a lessor recognize in income a nonrefundable lease bonus paid by a lessee on signing an operating lease?
When received
At the inception of the lease
At the lease expiration
Over the lease term
Lease payments under an operating lease shall be recognized as rent income by the lessor on
Straight line basis over the lease term unless another systematic basis is representative of the time pattern of the user's benefit.
Diminishing balance basis
Sum of units basis
Cash basis
In a operating lease recorded by the lessor, the equal monthly payments should be recorded as
Reduction of depreciation
Interest expense
Reduction of lease receivable
Rental income
Which statement characterizes an operating lease on the part of lessor?
The lessor records depreciation and interest income.
The lessor records the lease receivable.
The lessor transfers title of the underlying asset to the lessee for the duration of the lease term.
The lessor records depreciation and rent revenue.
