Topic 4: Investment Property - Key Concepts & Quiz Questions

Lần 1:
Câu Hỏi 1 Which of the fol owing term does this statement define: “the amount of cash or cash
equivalents paid or the fair value of other consideration given to acquire an asset at the time of
its acquisition or construction”? a. Deemed cost b. Fair value c. Present value d. Cost The correct answer is: Cost
Câu Hỏi 2 ABC Ltd. owns a property which has two parts, part A and part B. Part A is used to
earn rental income; Part B is used for administrative purpose. These two parts cannot be sold
separately. How should ABC classify this property?
a. Part A should be classified as Investment property; part B should be classified as Inventories
b. Entire property should be classified as Investment property if the portion of B is insignificant
c. Part A should be classified as Investment property; part B should be classified as Owner- occupied property
d. Entire property should be classified as Owner-occupied property if the portion of B is insignificant
The correct answer is: Entire property should be classified as Investment property if the portion of B is insignificant
Câu Hỏi 3 ABC Ltd. chooses cost model for its investment property. It sold an investment
property that original y cost $20 million. The sel ing price was $6 million. Depreciation of $12
million had been recorded up to the date of sale. There was no accumulated impairment loss.
What does this disposal result in? a. $2 million loss b. $14 million loss c. $2 million gain d. $14 million gain
The correct answer is: $2 million loss
Câu Hỏi 4 An entity purchased land and building for leasing out under operating lease. Following
expenditures related to the acquisition: purchase price: 100; broker’s commission: 10; property
transfer tax: 20. What is the cost of the property? a. 130 b. 120 c. 100 d. 110 The correct answer is: 130
Câu Hỏi 5 ABC Ltd. chooses cost model for its investment property. At 1 Jan 20X8, ABC Ltd.
transferred an investment property to an owner-occupied property. Investment property has
originally cost of $20 million; accumulated depreciation up to the date of transfer was $12
million, there was no impairment loss; property’s fair value at 1 Jan 20X8 was $14 mil ion.
What was the carrying value of the Owner-occupied property recorded at 1 Jan 20X8? a. $2 million b. $14 million c. $12 million d. $8 million
Phản hồi The correct answer is: $8 million
Câu Hỏi 6 Which of the fol owing does not define investment property? a. (*) and (**).
b. Property held for capital appreciation (***)
c. Property used in the production or supply of goods or services (**)
d. Property held to earn rentals (*)
The correct answer is: Property used in the production or supply of goods or services (**)
Câu Hỏi 7 Which of the fol owing should be classified as Investment property?
a. Land and building held for long-term capital appreciation
b. Land and building held for administrative purposes.
c. Land and building held for used in the production of goods
d. Land and building held for short-term sale in the ordinary course of business
The correct answer is: Land and building held for long-term capital appreciation
Câu Hỏi 8 Entity measures its investment property under:
a. Cost model, fair value model or revaluation model
b. Cost model or Fair value model c. Cost model only
d. Cost model or Revaluation model
The correct answer is: Cost model or Fair value model
Câu Hỏi 9 Which of the fol owing properties owned by an entity would be classified as an investment property?
a. A new office building used as entity’s head office, purchased specifically in order to exploit its capital gains potential
b. A bungalow used for executive training.
c. A property that had been leased to a tenant, but which is no longer required and is now being held for resale
d. Land purchased for its investment potential. Planning permission has not been obtained for
building construction of any kind
The correct answer is: Land purchased for its investment potential. Planning permission has not been
obtained for building construction of any kind
Câu Hỏi 10 The fol owing costs should be accounted for as: 1. Start-up cost (unless they are
necessary to bring the property to the condition necessary for it to be capable of operating tin
the manner intended by management); 2. Operating losses incurred before the investment
property achieves the planned level of occupancy; 3. Abnormal amounts of wasted material,
labour or other resources incurred in constructing or developing the property. a. Expenses b. Extraordinary items
c. (Capitalised as) fixed assets
The correct answer is: Expenses Lần 2:
Câu Hỏi 1 Under IAS 40 – Investment Property, where should a gain or loss on disposal be recognized? a. Profit and loss statement
b. Statement of Financial Position
c. Statement of changes in equity d. None of them
The correct answer is: Profit and loss statement
Câu Hỏi 2 Choose the correct statement:
a. Fair value of investment property carried under cost model should not be disclosed in any financial statement.
b. Fair value of investment property carried under cost model should be disclosed in the
Statement of financial position.
c. Fair value of investment property carried under cost model should be disclosed in the
Statement of Other Comprehensive Income.
d. Fair value of investment property carried under cost model should be disclosed in the Disclosure note.
The correct answer is: Fair value of investment property carried under cost model should be disclosed in the Disclosure note.
Câu Hỏi 3 Investment property can be held by: 1. The owner; 2. A lessor, under a finance lease;
3. A lessee, under a finance lease. a. 1 and 2 only b. 1 to 3 al c. 1 and 3 only
The correct answer is: 1 and 3 only
Câu Hỏi 4 Which of the fol owing should be classified as Investment property?
a. Land and building held for sale in the ordinary course of business
b. Land and building held to earn rental income
c. Property being constructed on behalf of third parties.
d. An equipment held to earn rental income
The correct answer is: Land and building held to earn rental income
Câu Hỏi 5 ABC Ltd. owns a property which has two parts: part A and part B. Part A is used to
earn rental income; Part B is used for administrative purpose. Each part can be sold separately.
How should ABC classify this property?
a. Entire property should be classified as Investment property if the portion of B is insignificant
b. Part A should be classified as Investment property; part B should be classified as Inventories
c. Entire property should be classified as Owner-occupied property if the portion of B is significant
d. Part A should be classified as Investment property; part B should be classified as Owner- occupied property
The correct answer is: Part A should be classified as Investment property; part B should be classified as Owner-occupied property
Câu Hỏi 6 Which of the fol owing statements is true with regards to an investment property?
a. An investment property unlike owner-occupied property shall always be measured at its historical cost
b. An investment property generates cash flows largely independently of the other assets held by an entity.
c. The value in use of investment property is significantly higher than of owner-occupied property
d. An investment property unlike owner-occupied property shall always be depreciated over its useful life.
The correct answer is: An investment property generates cash flows largely independently of the other assets held by an entity.
Câu Hỏi 7 An investment property should initially be measured at: a. Cost b. Net realizable value c. Fair value d. Market value The correct answer is: Cost
Câu Hỏi 8 ABC Ltd. chooses fair value model for its investment property. At 1 Jan 20X8, ABC
Ltd. transferred an investment property to an owner-occupied property. Investment property
has originally cost of $20 million; accumulated depreciation up to the date of transfer was $12
million, there was no impairment loss; property’s fair value at 1 Jan 20X8 was $14 mil ion.
What was the carrying value of the Owner-occupied property recorded at 1 Jan 20X8? a. $8 million b. $14 million c. $2 million d. $12 million
The correct answer is: $14 million
Câu Hỏi 9 Which of the fol owing properties fall under the definition of investment property? a. None of them
b. Property being constructed on behalf of third party
c. Property occupied by an employee.
d. A building owned by an entity and leased out under an operating lease
The correct answer is: A building owned by an entity and leased out under an operating lease Câu Hỏi 10
Which of the fol owing are examples of investment properties: 1. Land held for long-term
capital appreciation; 2. Land held for an undetermined future use but not currently in use; 3. A
building owned by the undertaking (or held by the undertaking under a finance lease) and
leased out, via one, or more, operating leases; 4. A building that is vacant, but is held to be
leased out via one, or more, operating leases; 5. Property held for sale in the ordinary course of
business; 6. Property being built on behalf of third parties; 7. Owner-occupied property; 8.
Property that is being built for use as investment property; 9. Existing investment property that
is being redeveloped for continued use as investment property; 10 Property that is leased to
another undertaking, under a finance lease? a. 1 to 4 and 8 to 9 only b. 1 to 4 only c. 1 to 10 al d. 1 to 7 and 10 only
The correct answer is: 1 to 4 and 8 to 9 only
Document Outline

• Lần 1:
• Câu Hỏi 2 ABC Ltd. owns a property which has two p
• Câu Hỏi 3 ABC Ltd. chooses cost model for its inve
• Câu Hỏi 5 ABC Ltd. chooses cost model for its inve
• Câu Hỏi 6 Which of the following does not define i
• Câu Hỏi 7 Which of the following should be classif
• Câu Hỏi 9 Which of the following properties owned
• Câu Hỏi 10 The following costs should be accounted
• Câu Hỏi 1 Under IAS 40 – Investment Property, wher
• Câu Hỏi 2 Choose the correct statement:
• Câu Hỏi 3 Investment property can be held by: 1. T
• Câu Hỏi 4 Which of the following should be classif
• Câu Hỏi 5 ABC Ltd. owns a property which has two p
• Câu Hỏi 6 Which of the following statements is tru
• Câu Hỏi 7 An investment property should initially
• Câu Hỏi 8 ABC Ltd. chooses fair value model for it
• Câu Hỏi 9 Which of the following properties fall u