QUESTION 22 According to IAS 39 and IFRS 9, which is true about the classification of financial assets and financial liabilities A Bonds payable should be classified as financial liability measured as fair value B Held to maturity investments should be classified as financial assets measured as fair value C Loans and receivables should be classified as financial assets measured as amortized cost D Deposits from customers should be classified as financial liabilities measured as fair value 10 points QUESTION 23 Under IFRS, if an entity issues 5 preferred stock that gives shareholders the right to redeem the shares for cash equal to par value after 3 years How should this stock be accounted for on the books of the entity A Initially as equity and then reclassified as a liability when the redemption occurs B As equity or a liability at the option of the entity C As a liability since the entity cannot avoid settlement through delivery of cash if the holder demand redemption D As both equity and liability by split accounting

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QUESTION 22 According to IAS 39 and IFRS 9, which is true about the classification of financial assets and financial liabilities? A. Bonds payable should

QUESTION 22

According to IAS 39 and IFRS 9, which is true about the classification of financial assets and financial liabilities?

	A.	Bonds payable should be classified as financial liability measured as fair value
	B.	Held to maturity investments should be classified as financial assets measured as fair value.
	C.	Loans and receivables should be classified as financial assets measured as amortized cost.
	D.	Deposits from customers should be classified as financial liabilities measured as fair value.

10 points

QUESTION 23

Under IFRS, if an entity issues 5% preferred stock that gives shareholders the right to redeem the shares for cash equal to par value after 3 years. How should this stock be accounted for on the books of the entity?

	A.	Initially as equity and then reclassified as a liability when the redemption occurs.
	B.	As equity or a liability at the option of the entity
	C.	As a liability since the entity cannot avoid settlement through delivery of cash if the holder demand redemption.
	D.	As both equity and liability by split accounting.