Question

Determine the method(s) for measuring and/or presenting the income statement effects of debt securities (e.g., investment...

Determine the method(s) for measuring and/or presenting the income statement effects of debt securities (e.g., investment in bonds), loans and long-term receivables, and financial liabilities (e.g., bonds payable).

Homework Answers

Answer #1

Debt Securities: Debt securities are measured either at Amortized cost or FVTOCI. A security is measured at amortized cost if it compiles the test of business test model and contractual cash flow model test i.e. if the bond is held for interest income and held for principal repayment then it will be for amortized cost and should be measued at cost. If any of the test fails then the same is measured at FVTOCI and each year the same is revalued.

Long Term Receivables. It will be measured at fair value. FV is computed in commensuration with the market rate of interest

Financial liabiltiies. It will also be measured at fair value. FV is computed in commensuration with the market rate of interest

Hi,

I have soled the question. In case of any doubt give a comment and in case you are satisfied give thumbs up.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Financing Deficit Garlington Technologies Inc.'s 2019 financial statements are shown below: Income Statement for December 31,...
Financing Deficit Garlington Technologies Inc.'s 2019 financial statements are shown below: Income Statement for December 31, 2019 Sales $4,000,000 Operating costs 3,200,000 EBIT $  800,000 Interest 120,000 Pre-tax earnings $  680,000 Taxes (25%) 170,000 Net income 510,000 Dividends $  190,000 Balance Sheet as of December 31, 2019 Cash $   160,000 Accounts payable $   360,000 Receivables 360,000 Line of credit 0 Inventories 720,000 Accruals 200,000 Total CA $1,240,000 Total CL $   560,000 Fixed assets 4,000,000 Long-term bonds 1,000,000 Total Assets $5,240,000 Common stock 1,100,000 RE 2,580,000 Total...
Financing Deficit Garlington Technologies Inc.'s 2019 financial statements are shown below: Income Statement for December 31,...
Financing Deficit Garlington Technologies Inc.'s 2019 financial statements are shown below: Income Statement for December 31, 2019 Sales $4,000,000 Operating costs 3,200,000 EBIT $ 800,000 Interest 120,000 Pre-tax earnings $ 680,000 Taxes (25%) 170,000 Net income 510,000 Dividends $ 190,000 Balance Sheet as of December 31, 2019 Cash $ 160,000 Accounts payable $ 360,000 Receivables 360,000 Line of credit 0 Inventories 720,000 Accruals 200,000 Total CA $1,240,000 Total CL $ 560,000 Fixed assets 4,000,000 Long-term bonds 1,000,000 Total Assets $5,240,000...
Garlington Technologies Inc.'s 2019 financial statements are shown below: Income Statement for December 31, 2019 Sales...
Garlington Technologies Inc.'s 2019 financial statements are shown below: Income Statement for December 31, 2019 Sales $4,000,000 Operating costs 3,200,000 EBIT $  800,000 Interest 120,000 Pre-tax earnings $  680,000 Taxes (25%) 170,000 Net income 510,000 Dividends $  190,000 Balance Sheet as of December 31, 2019 Cash $   160,000 Accounts payable $   360,000 Receivables 360,000 Line of credit 0 Inventories 720,000 Accruals 200,000 Total CA $1,240,000 Total CL $   560,000 Fixed assets 4,000,000 Long-term bonds 1,000,000 Total Assets $5,240,000 Common stock 1,100,000 RE 2,580,000 Total L&E $5,240,000...
Which one of the following is an example of investment income from​ securities? A. depreciation of...
Which one of the following is an example of investment income from​ securities? A. depreciation of long−term assets B. gain on the sale of fixed assets C. deferred tax assets D. interest earned from debt securities
Operating Section of Statement of Cash Flows (Indirect Method) Assume following are the income statement and...
Operating Section of Statement of Cash Flows (Indirect Method) Assume following are the income statement and balance sheet for Nike for the year ended May 31, 2012, and a forecasted income statement and balance sheet for 2013. Income Statement ($ millions) 2012 actual 2013 Est. Revenues $ 18,627.0 $ 21,253.0 Cost of sales 10,239.6 11,689.0 Gross margin 8,387.4 9,564.0 Selling and administrative expense 5,953.7 6,801.0 Operating profit 2,433.7 2,763.0 Interest income, net 77.1 77.1 Other (expense) income, net (7.9) (7.9)...
The following table shows an abbreviated income statement and balance sheet for McDonald's Corporation for 2012....
The following table shows an abbreviated income statement and balance sheet for McDonald's Corporation for 2012. INCOME STATEMENT OF MCDONALD’S CORP., 2012 (Figures in $ millions)   Net sales 27,572   Costs 17,574   Depreciation 1,407   Earnings before interest and taxes (EBIT) 8,591   Interest expense 522   Pretax income 8,069   Taxes 2,624   Net income 5,445 BALANCE SHEET OF MCDONALD’S CORP., 2012 (Figures in $ millions)   Assets 2012 2011 Liabilities and Shareholders' equity 2012 2011 Current assets Current liabilities   Cash and marketable securities 2,341 2,341...
I need to find which of the following assets and liabilities are current/short-term: Assets: Bonds ;...
I need to find which of the following assets and liabilities are current/short-term: Assets: Bonds ; Preferred stocks ; Common stocks ; Mortgage loans ; Real estate ; Cash, cash equivalents and short-term investments .; Contract loans ; Derivatives ; Securities lending collateral assets ; Other long-term investments ; Investment income due and accrued ; Net deferred federal income tax asset ; Other assets ; Separate account assets . Liabilities: Reserves for life and health insurance, annuities and deposit-type contracts...
Operating Section of Statement of Cash Flows (Indirect Method) Following are the income statement and balance...
Operating Section of Statement of Cash Flows (Indirect Method) Following are the income statement and balance sheet for Nike Inc. for the year ended May 31, 2016, and a forecasted income statement and balance sheet for 2017. Nike Inc. Income Statement For Year Ended May 31 $ millions 2016 actual 2017 Est. Revenues $ 32,376 $ 34,319 Cost of sales 17,405 18,464 Gross profit 14,971 15,855 Demand creation expense 3,278 3,466 Operating overhead expense 7,191 7,619 Total selling and administrative...
For each of the following accounts, signify which financial statement would contain the account balance. (Please...
For each of the following accounts, signify which financial statement would contain the account balance. (Please note this question focuses only on the balance sheet and income statement.)       -       A.       B.       C.    Interest expense       -       A.       B.       C.    Bonds payable (mature in 6 months)       -       A.       B.       C.    Bonds payable (mature in 3...
The financial statements of the company are shown below: The Company Income Statement 2017 Sales $...
The financial statements of the company are shown below: The Company Income Statement 2017 Sales $ 10,050,000 Cost of Goods Sold 5,825,000 Depreciation Expense 580,000 Gross Profit $ 3,645,000 Selling and Administrative Expenses 2,950,000 EBIT $ 695,000 Interest Expense 275,000 Income before Tax $ 420,000 Taxes 272,000 Net Income $ 148,000 The Company Comparative Balance Sheets 2017 2016 Cash $ 46,000 $ 41,000 Accounts Receivable 647,000 675,000 Inventory 626,000 541,000 Total Current Assets $ 1,319,000 $ 1,257,000 Fixed Assets 2,200,000...