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- 1. Multiple Choice
1. Which is considered an investment property?
Building held for lease under an operating lease
Building under construction
Building held for sale in the normal course of business
Building used in business
- 2. Multiple Choice
An investment property shall be initially measure at
At cost
Cost less accumulated impairment losses
Depreciable cost less accumulated impairment losses
Fair value less accumulated impairment losses
- 3. Multiple Choice
An entity has investment property that is held to earn rental income. The entity uses fair value model for reporting the investment property. Which statement is true?
Changes in fair value are recognized in profit or loss of the current period.
Changes in fair value are reported as an extra ordinary gain in the period
Changes in fair value are reported as component of other comprehensive income for the period
Changes in fair value are reported as deferred revenue for the period
- 4. Multiple Choice
An entity has investment property and uses fair value model. Which of the following statements is true?
The entity should measure the investment property at cost less accumulated depreciation and less accumulated impairment losses
The entity should report the increase in fair value in other comprehensive income for the period
The entity should depreciate the investment property using normal depreciation policy
The entity does not record depreciation on the investment
- 5. Multiple Choice
An entity purchased land for future use and appropriately classified the land as investment property. What measurement model may be used to report the land?
Fair value model or revaluation model
Revaluation model
Cost model or fair value model
Cost model or revaluation model
- 6. Multiple Choice
In case the property held under an operating lease and classified as investment property
The entity has to use the cost model only
The entity has to use fair value model only
The entity has the choice between the cost model and the fair value model
The entity needs only to disclose the fair value and can use the cost model
- 7. Multiple Choice
Transfer from investment property to property, plant and equipment is appropriate
When there is a change of use
Based on the entity’s discretion
Only when the entity adopts the fair value model
The entity can never transfer property into another classification one it is classified as investment
- 8. Multiple Choice
Which of the following statements regarding investment property is correct?
If the entity elects the fair value model, no depreciation is taken
Gain or loss from fair value adjustments is reported in the income statement
If the entity elects the cost model, depreciation should be recognized
All of these statements are correct regarding the investment property
- 9. Multiple Choice
An investment property is derecognized when
It is disposed to a third party
It is permanently withdrawn from use
No future economic benefits are expected from the disposal
All of the above cases
- 10. Multiple Choice
Which of the following additional disclosures must be made when an entity chooses the cost model as the accounting policy for investment property?
The fair value of the property
The present value of the property
The value in use of the property
The net realizable value of the property
- 11. Multiple Choice
Which of the following disclosures shall be made when the fair value model has been adopted for investment property?
Depreciation method
The amount of impairment loss recognized
Useful life or depreciation rate used
Net gains or losses from fair value adjustments
- 12. Multiple Choice
All of the following properties fall under the definition of investment property, except
Land held for long-term capital appreciation
Property occupied by an employee paying the market rent
Land held for a currently undetermined use
A building owned by an entity and leased out under an operating leased
- 13. Multiple Choice
Subsequent to initial recognition, the investment property shall be measure at
Fair value
Cost less any accumulated depreciation and any accumulated impairment losses
Revalued amount
Either fair value or cost less any accumulated depreciation and any accumulated impairment losses
- 14. Multiple Choice
When the entity uses the cost model, transfers between investment property, owner-occupied property and inventory shall be made at
Fair value
Carrying amount
Cost
Assessed value
- 15. Multiple Choice
A transfer from investment property carried at fair value to owner-occupied property shall be accounted for at
Fair value, which becomes the deemed cost for subsequent accounting
Carrying amount
Historical cost
Fair value less cost of disposal
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