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Rezy Pablio Mabao - SAS 3
Rezy Pablio Mabao - SAS 3
SAS #3
Date:AUGUST 05,2021
Section: A-BSA-05
Try answering the questions below by writing your ideas under the first column What Know.
It’s okay if you write key words or phrase that you think related to the questions.
Regular way purchase or 1.How do you account for The financial asset acquired
sale is a purchase or sale of regular way purchase or sale and the associated liability to
of financial assets? pay for it are recognized on
a financial asset under a the trade date (i.e., the date
contract whose terms of commitment to purchase.
require delivery of the asset
within the time frame
established generally by
regulation or convention in
the marketplace concerned
(IFRS 9.
TRUE OR FALSE. Before each number, write TRUE, if the statement is correct, and
FALSE if it is incorrect.
1. FALSE – Day 1
2. TRUE
3. FALSE
4. FALSE
5. FALSE
1. On Dec 29, 20x1, Jin Co. acquires 1,000 units of an investment through a broker
at P1.00 per unit. Ownership over the financial asset transfers to Jin Co., and
Jin Co. pays the purchase price on Jan 3, 20x2. The fair values per unit are
P1.75 on Dec 31, 20x1 and P1.50 on Jan 3, 20x2. Requirement: Provide the
journal entries under (1) trade date accounting and (2) settlement date
accounting assuming the investment is classified as: (a)FVPL; (b)FVOCI
(mandatory); and (c) Amortized cost.
ANSWERS
1.Solutions:
(a) FVPL
Date Trade date accounting Settlement date accounting
Dec. FVPL asset 1,000 No entry
29, Payable 1,000
20x1
(b) FVOCI
Date Trade date accounting Settlement accounting
2. Solutions:
3. On Jan 1, 20x1, Suga Co. acquires P300,000 face amount, 10% bonds of Mojo, Inc. for
P300,000. Suga classifies the bonds as subsequently measured at fair value through other
comprehensive income. On Dec 31, 20x1, the fair value of the bonds is P270,000. Suga
estimates 12-month expected credit losses of P9,000.
Requirements: Prepare the journal entry to recognize the decrease in the fair
value of the investment.
ANSWERS
3. Solution:
Dec. 31, Impairment loss – P/L 9,000
20x1 Unrealized loss – OCI 21,000
ANSWERS
4. Solution:
Case 1
Jan. 1, Unrealized loss – P/L 10,000 10,000
20x3 FVPL asset
to record the change in fair value on reclassification
date
Case 2
Jan. 1, Impairment loss 6,000 10,000
20x3 Unrealized loss – OCI 4,000
FVOCI asset
to recognize the impairment loss and change in fair
value on reclassification date
Case 3
Jan. 1, Impairment loss 6,000 10,000
20x3 Unrealized loss – OCI 4,000
FVOCI asset
to recognize the impairment loss and change in fair
value on reclassification date