Investment (Pre-fi)

Question 1

This are assets held by an entity for the accretion of wealth through distribution (ex. interest, royalties, dividends, and rentals)

Answer 1

Investments

Question 2

This is an interest or share in a debt or equity of another entity that is represented in a financial instrument, which being dealt on capital markets

Answer 2

Security

Question 3

This represent ownership interest such as ordinary and preference shares

Answer 3

Equity securities

Question 4

These are financial assets that represent the terms of loan between the creditor and the lender

Answer 4

Debt securities

Question 5

These investments are measured at initial recognition and every reporting date at fair value

Answer 5

Equity Investments at Fair Value through Profit of Loss (FVPL)

Question 6

These investments shall be recorded upon acquisition at purchase price plus directly attributsbke transaction costs

Answer 6

Equity Investments at Fair Value through Other Comrehensive Income (FVOCI)

Question 7

This is the reduction in the par or stated value of the share capital accompanied by a proportionate increase in the number of shares outstanding

Answer 7

Share split

Question 8

These are corporate distributions to the shareholders proportionate to the number of shares held by the latter

Answer 8

Dividends

Question 9

These are generally recognized as receivable or as income when received

Answer 9

Cash dividends

Question 10

These are the issuance of shares in the same class held by the shareholders

Answer 10

Share dividends

Question 11

These are dividends that are distributable in the form of investee’s non-cash assets

Answer 11

Property dividends

Question 12

These are issued when a company does not have sufficient funds to issue dividends in the near future

Answer 12

Scrip dividends

Question 13

It is an entity over which the investors has significant influence

Answer 13

Associate

Question 14

It is a join arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement

Answer 14

Joint Venture

Question 15

What if an entity holds, directly or indirectly 20% more of the voting power of the investee?

Answer 15

Significant Influence

Question 16

This are any securities issued by a company and sold to an investor, with an expectation to gain a future return

Answer 16

Debt securities

Question 17

Investments are held for diverse reasons such as

Answer 17

for accretion of wealth, capital appreciation, ownership control, meeting business requirements and protection

Question 18

Under this method, on initial recognition, the investment in associate is recognized at cost, and the carrying amount is increased or decreased to recognize the investor’s share of the profit of loss of the investee after the date of acquisition

Answer 18

Equity method