ias40

Question 1

What does IAS 40 stand for?

Answer 1

International Accounting Standard 40

Question 2

True or False: IAS 40 applies to investment property.

Answer 2

True

Question 3

What is the primary objective of IAS 40?

Answer 3

To prescribe the accounting treatment for investment property.

Question 4

Fill in the blank: IAS 40 requires investment property to be measured using the ______ model or the cost model.

Answer 4

fair value

Question 5

What is considered investment property under IAS 40?

Answer 5

Property held to earn rentals or for capital appreciation.

Question 6

Multiple Choice: Which of the following is NOT considered investment property according to IAS 40? A) Land B) Owner-occupied property C) Building leased to others

Answer 6

B) Owner-occupied property

Question 7

True or False: Under IAS 40, investment property can be classified as held for sale.

Answer 7

False

Question 8

What is the fair value model in IAS 40?

Answer 8

A model where investment property is measured at fair value with changes recognized in profit or loss.

Question 9

Fill in the blank: The cost model under IAS 40 requires investment property to be measured at ______ less accumulated depreciation.

Answer 9

cost

Question 10

What types of property are excluded from IAS 40?

Answer 10

Owner-occupied property, property held for sale in the ordinary course of business, and biological assets.

Question 11

Multiple Choice: Which of the following is a criterion for recognizing investment property? A) The property is used for administrative purposes B) The property generates cash flows C) The property is leased to employees

Answer 11

B) The property generates cash flows

Question 12

What is the definition of ‘investment property’ according to IAS 40?

Answer 12

Property (land or a building) held to earn rentals or for capital appreciation or both.

Question 13

True or False: Under IAS 40, investment properties are subject to impairment testing.

Answer 13

True

Question 14

What are the two measurement models for investment property under IAS 40?

Answer 14

Fair value model and cost model.

Question 15

Fill in the blank: Under IAS 40, an entity must disclose the ______ of investment property.

Answer 15

fair value

Question 16

Multiple Choice: Which of the following is required under the fair value model? A) Annual revaluation B) Only when there is an indication of impairment C) No requirement for revaluation

Answer 16

A) Annual revaluation

Question 17

What should be included in the cost of an investment property?

Answer 17

Purchase price, transaction costs, and any directly attributable expenditures.

Question 18

True or False: Investment properties can be reclassified to owner-occupied property.

Answer 18

True

Question 19

Fill in the blank: An entity must assess whether an investment property is ______ at the end of each reporting period.

Answer 19

fairly valued

Question 20

What disclosures are required for investment properties under IAS 40?

Answer 20

Fair value, rental income, direct operating expenses, and the method of valuation.

Question 21

Multiple Choice: Which of the following is NOT a direct operating expense of investment property? A) Property management fees B) Depreciation C) Repairs and maintenance

Answer 21

B) Depreciation

Question 22

What is the difference between investment property and property, plant, and equipment?

Answer 22

Investment property is held for rental income or capital appreciation, while property, plant, and equipment is used in the production or supply of goods and services.

Question 23

True or False: The cost model allows for the revaluation of investment property.

Answer 23

False

Question 24

Fill in the blank: Changes in fair value of investment property are recognized in ______ under the fair value model.

Answer 24

profit or loss

Question 25

What is considered a change in use of investment property?

Answer 25

When the property is reclassified from investment property to owner-occupied or vice versa.

Question 26

Multiple Choice: Which of the following is NOT a criterion for classifying a property as investment property? A) Income generation B) Capital appreciation C) Owner occupation

Answer 26

C) Owner occupation

Question 27

True or False: An entity can choose to apply the fair value model for some investment properties and the cost model for others.

Answer 27

True

Question 28

What is the effective date of IAS 40?

Answer 28

January 1, 2001

Question 29

Fill in the blank: An entity must apply IAS 40 consistently to ______ investment properties.

Answer 29

all

Question 30

What is the primary benefit of using the fair value model?

Answer 30

It provides more relevant information about the current value of investment properties.

Question 31

Multiple Choice: Which of the following is an example of investment property? A) A factory building B) An office building rented out to tenants C) A personal residence

Answer 31

B) An office building rented out to tenants

Question 32

True or False: IAS 40 requires investment property to be recognized at cost only.

Answer 32

False

Question 33

What is the treatment of investment property when it is disposed of?

Answer 33

The investment property is derecognized, and any gain or loss is recognized in profit or loss.