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Quiz master: Cagape, Wendy P.

Topic: PAS 40-41 and PFRS 1

PAS 40 Investment Property

1. All of the following properties falls under PAS 40 except,


a. Land held for Long-term capital appreciation
b. Property occupied by an employee paying market rent
c. Land held for currently undetermined use
d. A building owned by the entity and leased out under operating Lease
2. An investment property shall be measured initially at
a. Cost
b. Cost less accumulated impairment loss
c. Depreciable cost less accumulated impairment losses
d. Fair Value less accumulated impairment loss
3. Transfer from investment property to PPE is appropriate
a. Based on entity’s discretion
b. Only when the entity adopts the fair value model
c. When there Is a change
d. The entity can never transfer property into classification once it is classified as investment

Juneeeel Company, a real estate entity, had a building with a carrying amount of P20,000,000 on 12/31/2018. The
building was used as offices of the entity’s admin staff.

On 12/31/18, the entity intended to rent out the building to independent third parties. The staff will be moved to a
new building purchased early in 2018.

On 12/31/18, the original building had a fair value of P35,000,000

On 12/31/18, the entity also had a land that was held for sale in the ordinary course of business.

The land had a carrying amount of P10,000,000 and fair value of P15,000,000 on 12/31/18. On such date, the entity
decided to hold the land for capital appreciation.

The accounting policy is to carry all investment property at fair value.

4. On 12/31/2018, what amount should be recognized in revaluation surplus as a result of transfer of the Land
to investment property?
a. 20,000,000
b. 35,000,000
c. 15,000,000
d. –none-
5. Darna company owned three properties which are classified as investment property.

Initial Cost Fair Value Fair Value


12/31/18 12/31/19
Property 1 2,700,000 3,200,000 3,500,000
Property 2 2,350,000 3,500,00 2,750,000
Property 3 1,450,000 4,570,000 4,600,000

Each property was acquired five years ago with a useful life of 20 years. The accounting policy is to use the fair value
model for investment property.

What is the gain or loss to be recognized for the year ended December 31, 2019?

a. 189,000 loss
b. 150,000 loss
c. 300,000 gain
d. 420,000 loss

PAS 41 Agriculture

1. Biological transformation results from assets changes through all of the ff, except
a. Growth
b. Degeneration
c. Procreation
d. Production of Agricultural produce
2. Where there is a production cycle of more than one year for biological asset, PAS 41 encourages separate
disclosure of
a. Physical change only
b. Price change only
c. Total change in value
d. Physical change and Price change
3. All of the following would be classified as biological asset except,
a. Dairy cattle
b. Chicken
c. Egg
d. Tree
4. BEA company is a producer of coffee. The entity is considering the valuation of harvested coffee beans.
Industry practice is to value the coffee beans at market value and uses as reference a local publication
“Accounting for successful Farms”
On December 31, 2018, the entity has harvested coffee beans costing P3,000,000 and with a fair value less
cost of disposal of P3,500,000 at the point of harvest
Because of long aging and maturation process after harvest, the harvested coffee beans were still on hand
on December 31, 2019. On such date, the fair value less cost of disposal is P3,900,000 and the net realizable
value is P3,200,000.
What is the measurement of the coffee beans inventory on December 31, 2019?
a. 3,000,000
b. 3,200,000
c. 3,500,000
d. 3,900,000
5. Dairy Company provided the following information for the year ended December 31, 2019:
Cash 500,000
Trade and other receivables 1,500,000
Inventories 100,000
Dairy livestock – immature 50,000
Dairy livestock – mature 450,000
PPE net 520,000
Note payable 200,000
Share capital 1,000,000
Fair value of milk produced 600,000
Gain from change in fair value 30,000
Inventories used 140,000

What is the Fair value of the biological assets on December 31, 2019?
a. 550,000
b. 450,000
c. 500,000
d. 400,000
PFRS 1 First time adoption of PFRS

1. This is defined as the first time annual financial statements in which an entity adopts PFRS by an explicit and
unreserved statement of compliance with PFRS
a. PFRS financial statements
b. First PFRS financial statements
c. Opening PFRS statement of financial position
d. First audited financial statements
2. An entity that presents first annual financial statements that conform with PFRS is known as
a. An originating entity
b. A provisional presenter
c. A first time adopter
d. An initial reporter
3. The statement of financial position at the end of transition to PFRS is best described as
a. Provisional PFRS statement of Financial position
b. Closing PFRS statement of financial position
c. Opening pfrs statement of financial position
d. Originating PFRS statement of financial position
4. Which is not required adjustment in an opening PFRS statement of financial position
a. Recognized all assets and liabilities required under PFRS
b. Derecognized assets and liabilities not permitted by PFRS
c. Disclose as comparative information all figures under previous GAAP alongside figures for the current
year presented under PFRS
d. Measure all recognized assets and liabilities according to principles contained in PFRS
5. An entity is a first time adopter of PFRS. The most recent FS is presented under previous GAAP were on
December 31,2019. The entity adopted PFRS for the first time and intended to present the first PFRS FS on
December 31,2020. The entity plans to present a two-year comparative information for years 2019 and
2018. The opening PFRS statement of financial position should be prepared on
a. January 1, 2019
b. January 1, 2017
c. January 1, 2018
d. January 1, 2020

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