Which Statement Is Correct About an at Fair Value Through

question 9

Multiple Choice

Which statement is correct about an at fair value through profit or loss investment?

• A)The investment is recorded at fair value.
• B)Changes in fair value are recorded in OCI.
• C)The investment is recorded at amortized cost.
• D)The category cannot include debt instruments.

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Definitions:

Associate

A company in which another company owns a significant portion (usually between 20% and 50%) but not a majority stake, providing it with significant influence.

Equity Entries

Accounting transactions that affect the owners' equity account in a company's balance sheet, such as issuing stock or paying dividends.

Parent Entities

Companies that own more than half of the voting rights of another company or have control over it, making the other company a subsidiary.

Goodwill

An intangible asset that represents the excess value of a company over the fair value of its identifiable assets and liabilities, often arising from acquisitions.