Editedquiz_chapter-9_investment-property

Chapter 9 Investment Property

QUIZ 1. Which of the following qualifies for classification as an investment property? a. Property that is currently being developed for future use as investment property b. Investment property that is currently being developed for future use as owner-occupied property c. Property that is leased out to another entity under a finance lease d. Building being rented from another entity under an operating lease and leased out under various operating leases. 2. Select the correct statement. a. A leasing company should treat all assets used in providing lease services as investment property. b. Investment properties that are to be disposed of without further development are treated as investment property until they are derecognized. c. All investment properties held for capital appreciation will be classified as held for sale in the long run. d. Investment properties being redeveloped as investment properties on behalf of third parties are investment properties. 3. Select the incorrect statement regarding impairments of investment properties. a. Investment properties are subject to impairment. b. Impairments of investment properties of government entities are recognized in surplus or deficit. c. Compensation from third parties for investment property that was impaired or lost shall be recognized in surplus or deficit when the compensation becomes receivable and not offset with the amount of loss. d. Impairment losses on investment properties measured under the cost model are never reversed. 4. Derecognition of investment property is not required when a. it becomes the subject of an operating lease. b. it is sold. c. the property is assessed to have no future economic benefits. d. it becomes the subject of a finance lease. 5. Which of the following assets may be classified as investment property? a. Land held for long-term capital appreciation b. Equipment held for lease

c. Intangible asset held for lease d. Building held for lease e. a and d only 6. Which of the following properties falls under the definition of investment property? I. Land held for long-term capital appreciation II. Property occupied by an employee paying market rent III. Property being constructed on behalf of third parties IV. A building owned by an entity and leased out under an operating lease a. I, II b. II, IV c. I, IV d. II, III, IV 7. Which of the following measurement bases is acceptable for the subsequent measurement of an investment property held by a government entity? a. fair value b. fair value less costs to sell c. cost less accumulated impairment losses d. none, all of these are unacceptable. C – Land that is classified as investment property is subsequently measured at cost less accumulated impairment losses. 8. The distinguishing characteristic that identifies an investment property from the other assets of an entity is? a. Changes in fair value of the asset is recognized in surplus or deficit. b. The property does not derive cash flows separate from the other assets of the entity. c. Generates separately identifiable cash flows from the other assets of the entity. d. Earns rental as part of the ordinary operations of the entity. 9. Which of the following statements is correct regarding investment property? a. An entity may classify assets other than land and/or building as investment property. b. During the period, Entity A, a government entity, reclassifies a building that was previously used as office space to investment property. Entity A will recognize a gain if the fair value of the asset exceeds its carrying amount on the date of transfer. c. When a government entity applies the fair value model to account for its investment properties subsequent to initial recognition, changes in fair values are recognized in surplus or deficit rather than a direct adjustment to equity. d. Transfers to or from investment property shall be made when, and only when, there is a change in use. 10. Under this model, investment properties are measured at cost less accumulated depreciation and accumulated impairment losses. a. Impairment loss model

b. Cost model c. Fair value model d. Gorgeous model

“Praise be to the God and Father of our Lord Jesus Christ, the Father of compassion and the God of all comfort, who comforts us in all our troubles, so that we can comfort those in any trouble with the comfort we ourselves have received from God.” (2 Corinthians 1:3-4)

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