Identify which of the following financial instruments are required under IAS 39 Financial Instruments: Recognition and Measurement to be measured at fair value through profit and loss: $\begin{array}{|l|l|} \hline \text { I } & \text { Loans receivable } \\ \hline \text { II } & \text { Shares held for trading } \\ \hline \text { III } & \text { Loans payable } \\ \hline \text { IV } & \text { Favourable derivative instruments } \\ \hline \text { V } & \text { Unfavourable derivative instruments } \\ \hline \end{array}$

A) I, II and III B) I, II and IV C) II, III and IV D) II, IV and V A) I, II and III B) I, II and IV C) II, III and IV D) II, IV and V

Exam 12: Accounting for Financial Instruments

Catchup Company buys a contract in S&P 500 futures,taking a buy position on 1 April 2013 to 'take delivery' on 30 May 2013.A unit contract in S&P 500 futures is priced at the S&P multiplied by $25.On 1 April the S&P is 2950.By 1 May the index has dropped to 2600 and Catchup decides to close out the contract.What is Catchup's gain or loss on the futures contract?

(Multiple Choice)

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Question 41

Which of the following are examples of derivative financial instruments?

(Multiple Choice)

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Question 42

Racquet Plc issued £20 million of convertible notes on 1 July 2013.The notes have a life of 6 years and a face value of £20 each.Annual interest of 5% is payable at the end of each year.The notes were issued at their face value and can be converted at any time over their lives.Organisations with a similar risk profile to Racquet Plc have issued debt with similar terms but without the option to convert at the rate of 7%.What are the appropriate accounting entries to record the conversion of the notes to equity on 1 July 2014 (after interest has been paid and recorded)?

(Multiple Choice)

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Question 43

The characteristics of a swap agreement may be best described as:

(Multiple Choice)

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Question 44

Which of the following statements about a swap instrument is correct?

(Multiple Choice)

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Question 45

Which of the following statements is true about a share option:

(Multiple Choice)

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Question 46

Identify which of the following financial instruments are required under IAS 39 Financial Instruments: Recognition and Measurement to be measured at fair value through profit and loss: I Loans receivable II Shares held for trading III Loans payable IV Favourable derivative instruments V Unfavourable derivative instruments

(Multiple Choice)

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Question 47

David Plc acquired a parcel of 50 000 call options in Goliath Plc on 1 November 2012.The price of the options was €1.50 each and they may be exercised any time prior to 30 June 2015 at exercise price of €30.On the same date the market price for Goliath Ltd shares is €25.On David Plc's reporting period date - 30 June 2013 - the company is still holding the options.The market price of the options at that time was €1.80 each and the share price is €27. What is the financial effect of the above transactions on David Ltd's statement of comprehensive income for the year ending 30 June 2013?

(Multiple Choice)

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Question 48

In differentiating between a financial liability and equity,the report preparer must consider:

(Multiple Choice)

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Question 49

In disclosing information about how a financial asset or financial liability meets the conditions to be classified as 'at fair value through profit and loss',an entity must have a narrative description of how this designation is consistent with:

(Multiple Choice)

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Question 50

A preference share is a financial liability:

(Multiple Choice)

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Question 51

Which of the following are examples of primary financial instruments?

(Multiple Choice)

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Question 52

If an entity issued a convertible note at a price of £40.00 and it was determined that a debt instrument of similar risk and rate of interest of 10%-but without the option to convert to equity-could be sold for £32.00,what would be the liability component of the convertible note?

(Multiple Choice)

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Question 53

What three characteristics must be established before an instrument is considered to be a derivative?

(Essay)

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Question 54

In a convertible note,IAS 32 Financial Instruments: Recognition and Measurement requires the holder of such a financial instrument to present the liability component and the equity component separately on the statement of financial position.

(True/False)

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Question 55

If an entity issued a convertible note at a price of €40.00 and it was determined that a debt instrument of similar risk and rate of interest of 10%-but without the option to convert to equity-could be sold for €32.00,what would be the equity component of the convertible note?

(Multiple Choice)

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Question 56

Explain the reason for the rise in the development and use of financial instruments in recent years.Describe some of the key accounting issues regulators have had to face in light of this increased use and development.

(Essay)

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Question 57

Which of the following ratios are used as an indicator of the inherent risk in investing in an entity?

(Multiple Choice)

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Question 58

IAS 39 stipulates how financial instruments are to be recognised and measured.Specifically these instruments could be:

(Multiple Choice)

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Question 59

Under the requirements of the IASB Conceptual Framework how would convertible notes be classified in the statement of financial position?

(Multiple Choice)

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Question 60

Showing 41 - 60 of 70

Exam 12: Accounting for Financial Instruments

Which of the following are examples of derivative financial instruments?

The characteristics of a swap agreement may be best described as:

Which of the following statements about a swap instrument is correct?

Which of the following statements is true about a share option:

In differentiating between a financial liability and equity,the report preparer must consider:

In disclosing information about how a financial asset or financial liability meets the conditions to be classified as 'at fair value through profit and loss',an entity must have a narrative description of how this designation is consistent with:

A preference share is a financial liability:

Which of the following are examples of primary financial instruments?

If an entity issued a convertible note at a price of £40.00 and it was determined that a debt instrument of similar risk and rate of interest of 10%-but without the option to convert to equity-could be sold for £32.00,what would be the liability component of the convertible note?

What three characteristics must be established before an instrument is considered to be a derivative?

In a convertible note,IAS 32 Financial Instruments: Recognition and Measurement requires the holder of such a financial instrument to present the liability component and the equity component separately on the statement of financial position.

If an entity issued a convertible note at a price of €40.00 and it was determined that a debt instrument of similar risk and rate of interest of 10%-but without the option to convert to equity-could be sold for €32.00,what would be the equity component of the convertible note?

Explain the reason for the rise in the development and use of financial instruments in recent years.Describe some of the key accounting issues regulators have had to face in light of this increased use and development.

Which of the following ratios are used as an indicator of the inherent risk in investing in an entity?

IAS 39 stipulates how financial instruments are to be recognised and measured.Specifically these instruments could be:

Under the requirements of the IASB Conceptual Framework how would convertible notes be classified in the statement of financial position?

An Overview of the International External Reporting Environment

The Conceptual Framework of Accounting and Its Relevance to Financial Reporting

Theories of Financial Accounting

An Overview of Accounting for Assets

Depreciation of Property, Plant and Equipment

Revaluations and Impairment Testing of Non-Current Assets

Inventory

Accounting for Intangibles

An Overview of Accounting for Liabilities

Accounting for Leases

Share Capital, Reserves and Share Options Employee Bonus Schemes

Revenue Recognition Issues

The Statement of Comprehensive Income and Statement of Changes in Equity

Accounting for Income Taxes

The Statement of Cash Flows

Events Occurring After the Reporting Date

Related-Party Disclosures

Earnings Per Share

Further Consolidation Issues I: Accounting for Intragroup Transactions

Further Consolidation Issues II: Accounting for Non-Controlling Interests

Further Consolidation Issues III: Accounting for Indirect Ownership Interest

Accounting for Foreign Currency Transactions

Translating the Financial Statements of Foreign Operations

Accounting for Corporate Social Responsibility

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