Non-monetary grants are measure at a) the fair value of non-monetary asset b) nominal amount c) the amount of cash received or receivable d) choice "a" or "b"

Which of the following is considered a government grant under the PAS#20? a) Award of major government contracts c) Free technical advice b) Cancellation of existing loan from the government d) Public improvements in your area

PAS #21- Effect of Change in FX rates 39 Which of the following statements is incorrect? a) An entity can only have one functional currency but it can have as many presentation currencies at it wishes b) A foreign operation that is essentially an extension of the entity would have the same functional currency as that of the entity. c) Foreign currency transaction is essentially recognized at the spot exchange rate at the date of the transaction d) Subsequent to initial recognition, both monetary and non-monetary items arising from a foreign currency transaction are translated at the closing rate.

40 On December 1, 20x1 you imported a machine from a foreign supplier for $100,000 due for settlement on January 6, 20x2. Your functional currency is the Philippine peso. When preparing the December 31, 20x1 statement of financial position, which of the following will you translate to the closing rate? a) machine c) a and b b) accounts payable d) none of the choices PAS #23- Borrowing Costs 41 On January 1, 20x1 the Company started the construction of a qualifying asset. The qualifying asset is financed through general borrowings. The average expenditures during the year amounted to P9,500,000. The capitalization rate is 11%. The actual borrowing costs incurred during the period were P1,990,000. How much are the borrowing costs eligible for capitalization? a) P1,990,000 c) P 1,090,000 b) P1,045,000 d) P990,000 Capitalization of borrowing cost a) Shall be suspended during temporary period of delay. b) Maybe suspended only during extended period of delay in which active development is delayed. c) Shall be suspended only during extended period of delay in which active development is delayed. d) Shall never be suspended 43 Which of the following costs may not be eligible for capitalization as borrowing costs under PAS 23? a) Interests on bonds issued to finance the construction of a qualifying asset. b) Amortization of discounts or premiums relating to borrowings that qualify for capitalization. c) Exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to interest costs pertaining to a qualifying asset. d) Imputed cost of equity Conceptual Framework/ Accounting Overview/ Standards/Financial Statements 44 The main concept in recognizing income from government grants is, a) capital approach c) matching b) historical cost or FV whichever is more appropriate d) revenue approach A Company appropriates P1M to fund employee benefits for the last quarter of the year. The Company deposits the P1M fund in a payroll account. This economic activity is most appropriately referred to as, a) funding c) investment b) savings d) exchange