BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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BOND INVESTMENT AT AMORTIZED COST
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BOND INVESTMENT AT PVOCI
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LOAN RECEIVABLE AT AMORTIZED COST
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BOND INVESTMENT AT FVPL
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Detailed explanation-1: -Financial assets subject to impairment lease receivables. contract assets. irrevocable loan commitments, and. financial guarantee contracts that are not accounted for at fair value through profit or loss under IFRS 9.
Detailed explanation-2: -Financial assets or liabilities at fair value through profit or loss (FVPL) (unrealized gains or losses recognized in profit or loss) satisfy one of the two following criteria: 1) Financial assets or liabilities held for trading are intended to be sold or repurchased in the near term.
Detailed explanation-3: -They are classified as non-current assets, unless management intends to dispose of them within 12 months from the end of the reporting period. Gains and losses on “Financial assets at fair value through profit or loss” are immediately booked to the Income Statement.
Detailed explanation-4: -FVPL is the default treatment for equity investments where transaction costs such as broker fees are expensed and not capitalised within the initial cost of the asset. Subsequently, the investment is revalued to fair value at each year end, with the gain or loss being taken to the statement of profit or loss.