Increases in Fair Value Over Cost in Relation to Land

question 23

Multiple Choice

Increases in fair value over cost in relation to land used for agricultural purposes is recognised in equity when the land is:

• A) an investment property measured at fair value and accounted for under AASB 140/IAS 40.
• B) an investment property measured at cost and accounted for under AASB 140/IAS 40.
• C) not an investment property, is measured at fair value and accounted for under AASB 116/IAS 16.
• D) not an investment property, is measured at cost and accounted for under AASB 116/IAS 16.

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Definitions:

Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specified price within a specific time period.

In-the-money

Describes an option that has intrinsic value, where a call option's strike price is below the market price of the underlying asset, or a put option's strike price is above it.

Intrinsic Value

The perceived or calculated real value of an asset, investment, or company based on fundamental analysis without regard to its market value.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price within a specified time frame.