TRUE OR FALSE

1. An entity may classify assets other than land and/or building as investment

property.

2. In some cases, a building that is being used partly as an owner-occupied

property and partly as held for rentals, under operating lease, is presented in

the statement of financial position as partly PPE and partly investment

property.

3. Heidel Co. exchanges a piece of land for another land with Sol Co. Heidel

classifies the land as investment property. The land given to Sol has a fair value

of P200,000 while the land received from Sol has a fair value of P240,000.

Heidel Co. paid P30,000 cash to Sol on the exchange. Heidel Co. shall initially

recognize the land received from Sol at P230,000.

4. Under the fair value model of PAS 40, investment properties are initially and

subsequently measured at fair value.

5. Under the fair value model, gains or losses resulting from changes in fair value

are recognized in profit or loss.

6. Investment properties measured under the fair value model are not depreciated

even if the investment property is depreciable, e.g., building.

7. Transfers to, or from, investment property shall be made when, and only when,

there is a change in use.

8. During the period, Whirl Co. reclassifies a building that was previously used as

office space to investment property. Whirl Co. shall apply PAS 16 until the date

of reclassification.

9. The cost of modification of a product to conform to a specific customer's need

is considered an R&D expense.

10. The cost of an internally generated patent that is subject to amortization is

confined to legal and registration fees only.

11. An intangible asset with a finite useful life is amortized over the shorter of its

useful life and legal life.

12. An intangible asset is not amortized if it has an indefinite useful life.

13. Grind Co. self-generated a patent. Grind Co. shall amortize the patent over the

patent's estimated useful life, if shorter than 20 years.

14. PAS 38 does not require a specific amortization method that entities shall use.

However, if no other amortization method best reflects the pattern of

consumption of economic benefits from the intangible asset, then the entity

shall use the straight line method of amortization.

15. When amortizing intangible assets, residual value is normally disregarded

unless the entity can reasonably expect, and has the ability, to sell the intangible

asset at the end of its useful life.