Reference no: EM132959421

Problem 1: The following statements are based on PAS 28 (Investment in Associates):

Statement I: An investment in an associate shall be accounted for using the equity method (benchmark) or cost method (alternative).

Statement II: An investor shall discontinue the use of equity method from the date when it ceases to have significant influence over an associate and shall account for the investment in accordance with PFRS 9.

Statement III: On the loss of significant influence, the investor shall measure at historical cost any investment the investor retains in the former associate.

a. Only statement I is false

b. Only statement II is true

c. Only statement III is true

d. All of the statements are false

Problem 2: Which of the following statements is true concerning recognition of unrealized gains and losses?

a. Unrealized gains and losses on financial assets held for trading shall be included in profit or loss.

b. Unrealized gains and losses on financial assets measured at amortized cost are not recognized.

c. Unrealized gains and losses on financial assets at fair value through other comprehensive income are not recognized in the income statement.

d. All of the above statements are true.