For a Corporation Reporting Under IFRS, When Shares Are Issued

question 71

Multiple Choice

For a corporation reporting under IFRS, when shares are issued for a noncash consideration and a ready market for the shares exists, they are recorded at

• A)zero.
• B)the fair value of the shares.
• C)the fair value of the assets acquired.
• D)the average of the fair value of the shares and the fair value of the assets acquired.

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Definitions:

Cost Basis

The original value or purchase price of an asset or investment for tax purposes, adjusted for factors like depreciation or improvements.

Budgeted Item

An expense or income that has been planned for and included in a budget.

Traded Asset

An asset that is bought and sold in financial markets, such as stocks, bonds, commodities, or currencies.

Capital Expenditure

Capital invested by an enterprise in procuring or upgrading solid assets such as land, manufacturing facilities, or hardware.