According to PAS 37, provisions are (choose the
incorrect statement)
disclosed only, unless their expected occurrence is remote
According to PAS 37, a present obligation that is
possible and can be measured reliably is
disclosed only
The essential elements of an intangible asset do not
include
probable outflow of resources embodying economic benefits
Provisions are normally recognized as a debit to ___
or loss and a credit to an estimated liability.
Expense
Costs incurred in research phase are expensed
immediately
True
According to PAS 38, which of the following may be
recognized as cost of intangible asset?
Purchase cost of an externally acquired publishing title
Provisions shall be reviewed at the end of each
reporting period and adjusted to reflect the current
best estimate
True
On January 1, 20x1, Entity A registers a patent for a
total registration and legal costs of ₱600,000. Entity
A estimates that the patent has a remaining useful life
of 25 years. How much is the amortization expense for
20x1?
P30,000
If the item of PPE is can only be used on one specific
R&D project, the cost of the PPE is capitalized
False
Is a liability of uncertain timing or amount → provision,
An essential element of an intangible asset, which means the entity
has the ability to benefit from the intangible asset or prevent others
from benefitting from it. → control,
The costs of self-creating an intangible asset include costs
of searching new knowledge and identifying and selecting possible
alternatives → research costs,
An intangible asset shall be measured initially at → cost,
An essential element of an intangible asset, may include revenue from
the sale of products or services, cost savings, or other benefits
resulting from the entity's use of the asset. → future economic
benefits,
The cost of intangible asset acquired in a business combination is
its ____ at the acquisition date → fair value,
The costs of self-creating an intangible asset include costs
of designing from selected alternative and using knowledge gained
from research → development costs
No provision is recognized for future operating losses
because they do not meet the definitions of a ___
(arising from past events).
Liability
A provision is a liability of certain timing or amount
False
Even if it is no longer probable that an outflow of
resources embodying economic benefits will be
required to settle the obligation, the provision shall
not be reversed
False
Only government grants that are related to biological
assets measured at fair value less costs to sell are
accounted for under PAS 20.
False
Is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date → fair value,
A biological asset shall be measured on initial recognition and at the
end of each reporting period at its → fair value less costs to sell,
Is the management by an entity of the biological transformation of
biological assets for sale, into agricultural produce, or into additional
biological assets → agricultural activity,
Held for use in the production or supply of goods or services or for
administrative purposes → owner-occupied property,
Land or a building held by the owner or by the lessee under finance
lease to earn rentals or for capital appreciation or both →
investment property,
Those other than consumable biological assets → bearer biological
assets,
Investment property is initially measured at → cost,
Those that are to be harvested as agricultural produce or sold as
biological assets → consumable biological assets,
Agricultural produce harvested from an entity’s biological assets shall
be measured at its → fair value less costs to sell at the point of
harvest,
Are the incremental costs directly attributable to the disposal of an
asset, excluding finance costs and income taxes → costs to sell
The distinguishing characteristic that identifies an
investment property from the other assets of an entity
is
it generates separately identifiable cash flows from the other assets of
the entity
Entity A acquires an investment property
for ₱1,000,000 cash. Additional costs incurred are as
follows:
Repairs and remodelling before
occupancy, ₱50,000.
Legal costs of transferring title to the
property, ₱20,000.
Repairs after occupancy, ₱15,000.
The investment property is estimated to have a
remaining useful life of 10 years and a residual value
equal to 5% of initial cost. Entity A uses the straight-
line method of depreciation. The investment property
has a fair value of ₱980,000 at the end of
P980,000
Biological assets and agricultural produce are
accounted for under PAS 41 only when they relate to
agricultural activity.
True
Entity A acquires an investment property
for ₱1,000,000 cash. Additional costs incurred are as
follows:
Repairs and remodelling before
occupancy, ₱50,000.
Legal costs of transferring title to the
property, ₱20,000.
Repairs after occupancy, ₱15,000.
The investment property is estimated to have a remaining useful life of 10 years and a
residual value equal to 5% of initial cost. Entity A uses the straight line method of
depreciation. How much is the carrying amount of the investment property under the
cost model after one year?
P968,350
Biological transformation comprises asset changes
through growth and procreation only.
False
Entity A acquires a building for ₱1,000,000. The
building is to be leased out under various operating
leases. The building has an estimated useful life of 10
years and zero residual value. Entity A uses the cost
model for its property, plant and equipment and the
fair value model for its investment property. At the
end of Year 1, the building is assessed to have a fair
value of ₱1,080,000. How much should Entity A
recognize in profit or loss in relation to the building?
P80,000 gain on change in fair value
Which of the following qualifies for classification as an
investment property?
Property that is currently being developed for future use as investment
property
Biological asset is initially and subsequently measured
at fair value.
False
