Under IFRS

question 30

Multiple Choice

Under IFRS:

• A) plant assets can be revalued downward, but not upwards to reflect their current value.
• B) straight-line depreciation is not allowed.
• C) gains, but not losses, can be recorded on the disposal of an asset.
• D) a component approach is used to depreciate a building.

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Definitions:

In-The-Money Option

An option with an exercise price that is favorable compared to the current market price of the underlying asset.

Initial Investment

The initial amount of money spent to start a project, purchase an asset, or embark on a financial venture, prior to any earnings or gains.

Conversion Ratio

A specific number of shares a bondholder can receive for each bond if they choose to convert it into stock.

Market Value

The present cost at which a service or asset is available for purchase or sale in the market.