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Accounting test

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This is a test for Accounting and it is based on Investment Property and journal entries are central to this topic

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DEPARTMENT OF ACCOUNTANCY Accounting 2A 2013 Unit 3: Investment Property (IAS 40) Index Page A General 2 B Question relating to this topic 3
- 2 - A. GENERAL 1. INTRODUCTION OF THE TOPIC Investment properties are non-current assets (land or a building or a part of a building or both) that an entity controls and holds over a period of time (normally longer than one reporting period) to earn rental income and/or gain from capital appreciation. The main accounting issues are the timing of the recognition, the measurement of the carrying amount, the choosing of an accounting model (historical cost or fair value) and the recognition thereof. During your first year you already learned how to: recogniseand measure investment properties using the fair value model. presentand disclose investment properties in financial reports. During your second year these topics will be elaborated upon. You must study the objective, scope and definitions of IAS 40.You must again study how to, recognise, present and disclose investment properties in the required manner. Revaluations are not discussed in Accounting 2A. 2. PRIOR KNOWLEDGE Students should already be able toidentify, recognise, present and disclose investment properties in the financial statements using the fair value accounting model. 3. RESOURCES In order to master this topic you should make use of the following resources (and in the stated order): 3.1 Chapter 4 Introduction to IFRS. 3.2 Class notes. 3.3 Questions in IFRS applications (refer section B). 3.4 Questions in the question bank (refer section B).
- 3 - 4. STUDY OUTCOMES After you have completed your studies of this topic you must be able to: • explain the objective and scope of the statement;  identify an investment property;  differentiate between an investment property and an owner-occupied property;  determine the cost price of an investment property at the acquisition date;  understand that investment properties can be recognised by applying the cost model or the fair value model, and be able to determine the carrying amount of investment property under each of the models;  recognise investment properties in terms of IAS 40 Investment property; and  presentand disclose investment properties in financial reports. 5. EXAMINATION POSSIBILITIES This topic will be assessed in any the following ways: • theoreticalor application questions involving case studies; • individual questions requiring specialised calculations of investment properties; • journals to recogniseinvestment properties; and • a Financial Statementsquestion involving identification, recognition, presentationand disclosure. B. QUESTIONS RELATING TO THIS TOPIC QUESTIONS IN IFRS APPLICATIONS Do the following examples and questions: Examples: - Examples 40 (135).1 – Ignore tax implications - Examples 40 (135).2
QUESTION BANK

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Accounting test

  • 1. DEPARTMENT OF ACCOUNTANCY Accounting 2A 2013 Unit 3: Investment Property (IAS 40) Index Page A General 2 B Question relating to this topic 3
  • 2. - 2 - A. GENERAL 1. INTRODUCTION OF THE TOPIC Investment properties are non-current assets (land or a building or a part of a building or both) that an entity controls and holds over a period of time (normally longer than one reporting period) to earn rental income and/or gain from capital appreciation. The main accounting issues are the timing of the recognition, the measurement of the carrying amount, the choosing of an accounting model (historical cost or fair value) and the recognition thereof. During your first year you already learned how to: recogniseand measure investment properties using the fair value model. presentand disclose investment properties in financial reports. During your second year these topics will be elaborated upon. You must study the objective, scope and definitions of IAS 40.You must again study how to, recognise, present and disclose investment properties in the required manner. Revaluations are not discussed in Accounting 2A. 2. PRIOR KNOWLEDGE Students should already be able toidentify, recognise, present and disclose investment properties in the financial statements using the fair value accounting model. 3. RESOURCES In order to master this topic you should make use of the following resources (and in the stated order): 3.1 Chapter 4 Introduction to IFRS. 3.2 Class notes. 3.3 Questions in IFRS applications (refer section B). 3.4 Questions in the question bank (refer section B).
  • 3. - 3 - 4. STUDY OUTCOMES After you have completed your studies of this topic you must be able to: • explain the objective and scope of the statement; ï‚Ÿ identify an investment property; ï‚Ÿ differentiate between an investment property and an owner-occupied property; ï‚Ÿ determine the cost price of an investment property at the acquisition date; ï‚Ÿ understand that investment properties can be recognised by applying the cost model or the fair value model, and be able to determine the carrying amount of investment property under each of the models; ï‚Ÿ recognise investment properties in terms of IAS 40 Investment property; and ï‚Ÿ presentand disclose investment properties in financial reports. 5. EXAMINATION POSSIBILITIES This topic will be assessed in any the following ways: • theoreticalor application questions involving case studies; • individual questions requiring specialised calculations of investment properties; • journals to recogniseinvestment properties; and • a Financial Statementsquestion involving identification, recognition, presentationand disclosure. B. QUESTIONS RELATING TO THIS TOPIC QUESTIONS IN IFRS APPLICATIONS Do the following examples and questions: Examples: - Examples 40 (135).1 – Ignore tax implications - Examples 40 (135).2