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NEW QUESTION: 1
A multinational company is converting the methodology of reporting by its subsidiaries in various countries to make it uniform with the requirements of the International Financial Reporting Standards (IFRS). While changing the reporting methodologies, accountants have to apply certain judgments.
Which one of the following is not a valid motivation for decision making on reporting methodologies?
A. to be consistent with the methodologies followed in the home country of the company
B. to present the financial statements in a manner that is understood by most users
C. to present the company's financial performance in the most favourable way
D. to comply with the information demands of government bodies in home country
Answer: C
NEW QUESTION: 2
If spot GBP/CHF is quoted 2.3875-80 and the 3-month forward outright is 2.3660-70, what are the forward points?
A. 21/21.5
B. 210/215
C. 215/210
D. 21.5/21
Answer: C
NEW QUESTION: 3
In April 30, 20X4, Deer Corp. approved a plan to dispose of a component of its business. For the period
January 1 through April 30, 20X4, the component had revenues of $500,000 and expenses of $800,000.
The assets of the component were sold on October 15, 20X4 at a loss. In its income statement for the
year ended December 31, 20X4, how should Deer report the component's operations from January 1 to
April 30, 20X4?
A. $500,000 and $800,000 should be included with revenues and expenses, respectively, as part of
continuing operations.
B. $300,000 should be reported as a loss from operations of a component and included in loss from
discontinued operations.
C. $300,000 should be reported as an extraordinary loss.
D. $300,000 should be reported as part of the loss on disposal of a component and included as part of
continuing operations.
Answer: B
Explanation:
Choice "d" is correct. Once the decision has been made to dispose of a component of a business and that
component meets the criteria to be classified as held for sale, the operating results of the component for
the period reported on, and any gain or loss from the disposal, should be reported separately from
continuing operations, net of tax. In this question, the component was classified as held for sale and was
sold in the same year.
Thus, in 20X4, the results of operations, the $300,000 ($500,000-$800,000) loss, are reported as a loss
from discontinued operations. The loss on disposal would be reported as part of that loss from
discontinued operations also.
Choice "a" is incorrect. The results of operations prior to the decision date, and also after the decision
date, are reported separately from the results of continuing operations as a part of discontinued
operations. Choice "b" is incorrect. The results of operations prior to the decision date, and also after the
decision date, are reported separately from the results of continuing operations as a loss from operations
of a component and included in loss from discontinued operations.
Choice "c" is incorrect. The results of discontinued operations are not reported as an extraordinary item.
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