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Thursday
Solution:
1.Find the most advantageous market
Market Price 140,000 145,000
Agent’s Commission (20,000) (22,000)
Transport Cost (6,000) (7,000)
Cost of Rent (1,000) (1,200)
SALES PROCEEDS 113,000 114,800
Formula:
Market Price (Active Market #2) 145,000
Less: Transport Cost (7,000)
Fair Value 138,000
PFRS 14
1. PFRS 14 applies
a. only to government-regulated activities
b. only to entities that choose to apply it
c. to all entities that use PFRS
d. only to first -time adopters that choose to apply it
3. According to PFRS 14, regulatory deferral accounts are classified in the statement of financial
position as
a. Current items
b. Noncurrent items
c. a or b
d. Neither a nor b
4. It is a principle of PFRS 14 that a first-time adopter must not continue to apply its previous GAAP
to the recognition, measurement, impairment and derecognition of regulatory deferral account
balances.
5. What are the exceptions to the ‘Continuation of existing accounting policy’ of PFRS 14?
a. Changes in accounting policies
b. Presentation of Regulatory Deferral Accounts
PAS 21 The Effects of Changes in Foreign Exchange Rates is applied when translating regulatory
deferral account balances that are denominated in a foreign currency.
PFRS 15
1. Define PFRS 15.
Answer: PFRS 15 provides the principles in reporting the nature, amount, timing and
uncertainty of revenue and cash flows arising from an entity's contracts with customers.
6. It is the price at which a promised good or service can be sold separately to a customer
Answer: Stand-alone Selling Price
PFRS 16 LEASES
1. What is the difference between lessee and lessor?
- Lessee is an entity that obtains the right to use an underlying asset for a period
of time in exchange for consideration. On the other hand, lessor is an entity that
provides the right to use an underlying asset for a period of time in exchange for
consideration.
2. What is a lease?
- A contract, or part of a contract, that conveys the right to use an asset for a
period of time in exchange for consideration.
3. Give at least 3 examples of Non-lease elements.
- Maintenance
- Security services
- Supply of utilities
- Supply of goods
- Supply of operational services
4. TRUE OR FALSE. Finance lease is a lease that does not transfer substantially
all the risks and rewards incidental to ownership of an underlying asset.
- FALSE, kasi ang finance lease ay pwedeng i-transfer all the risks and rewards
incidental to ownership of an underlying asset.
5. Give at least 2 indicators of finance lease
- Transfer of ownership
- Bargain purchase option (BPO)
- Lease term is at least 75% of the useful life of the leased asset
- Present value of lease payments is at least 90% of the fair value of the leased
asset at the inception date
- Leased asset is of specialized nature