Question : 141. Firms often acquire derivative instruments to hedge interest rate, exchange : 1245819

141. Firms often acquire derivative instruments to hedge interest rate, exchange rate, commodity price, and other risks. U.S. GAAP and IFRS classify derivatives into which of the following categories? A. Fair value hedges of a recognized asset or liability or of an unrecognized firm commitment, only. B. Cash flow hedges of an existing asset or liability or of a forecasted transaction, only. C. Nonhedging derivative, only.D. Fair value hedges of a recognized asset or liability or of an unrecognized firm commitment, cash flow hedges of an existing asset or liability or of a forecasted transaction, and nonhedging derivative.E. none of the above

142. Firms sometimes acquire bonds or capital stock of other entities for their expected returns (through interest, dividends, and price appreciation) without any intent to exert influence or control over the other entity. Which of the following is/are true? A.  U.S. GAAP and IFRS presume that the acquisition of any amount of bonds, and the acquisition of less than 20% of the voting stock of another entity implies an inability to exert significant influence or control. B. Firms may classify such securities as debt securities held to maturity (IFRS uses the term held-to-maturity investments). C. Firms may classify such securities as trading securities (IFRS uses the term financial assets at fair value through profit or loss). D. Firms may classify such securities as securities available for sale (IFRS uses the term available-for-sale financial assets). E. all of the above

143. Firms sometimes acquire bonds or capital stock of other entities for their expected returns (through interest, dividends, and price appreciation) without any intent to exert influence or control over the other entity. Which of the following is/are not true? A. U.S. GAAP and IFRS presume that the acquisition of any amount of bonds, and the acquisition of less than 50% of the voting stock of another entity implies an inability to exert significant influence or control. B. Firms may classify such securities as debt securities held to maturity (IFRS uses the term held-to-maturity investments). C. Firms may classify such securities as trading securities (IFRS uses the term financial assets at fair value through profit or loss). D. Firms may classify such securities as securities available for sale (IFRS uses the term available-for-sale financial assets). E. all of the above

144. Firms sometimes acquire bonds or capital stock of other entities for their expected returns (through interest, dividends, and price appreciation) without any intent to exert influence or control over the other entity. Which of the following is/are not true? A.  U.S. GAAP and IFRS presume that the acquisition of any amount of bonds, and the acquisition of less than 20% of the voting stock of another entity implies an inability to exert significant influence or control. B. Firms may classify such securities as debt securities held for short-term profit (IFRS uses the term held-for-maturity investments). C. Firms may classify such securities as trading securities (IFRS uses the term financial assets at fair value through profit or loss). D. Firms may classify such securities as securities available for sale (IFRS uses the term available-for-sale financial assets). E. all of the above

145. Income before taxes for financial reporting usually differs from taxable income reported to tax authorities. Which of the following is/are not true? A. Some of the differences may arise because of permanent differences (items that affect income for financial reporting but never affect taxable income, or vice versa).B. Some of the differences may arise because of temporary differences (items that affect income for financial reporting in a different period than for tax reporting). C. The difference between income tax expense and income tax payable represents the tax effects of temporary differences: either the firm will receive future benefits (deferred tax assets) or it must pay future taxes (deferred tax liabilities).D. U.S. GAAP and IFRS require firms to measure income tax expense based on the taxes assessed on the firm by income tax authorities.  E. all of the above

146. Which of the following is/are not true? A. U.S. GAAP and IFRS do not require the employer to recognize changes in the funded status of a defined benefit retirement plan on its balance sheet each period. B. U.S. GAAP and IFRS do not require the employer to recognize changes in the funded status of a defined benefit retirement plan immediately in net income. C. Changes in the net funded status of a defined benefit retirement plan because investment performance differs from expectations, or because of changes in actuarial assumptions, or in the retirement benefit formula, initially affect other comprehensive income. D. Firms amortize the amounts in Other Comprehensive Income over the expected period of benefit as an adjustment to retirement plan cost. E. all of the above

147. Which of the following is/are not true? A. U.S. GAAP and IFRS permit the employer to prepare consolidated financial statements with the retirement trust.B. The employer must report the net funded status of each defined benefit retirement plan (that is, the fair value of retirement trust assets minus the retirement trust obligation) as either an asset or a liability on its balance sheet. C. The employer must report the net funded status of each defined benefit retirement plan and credit (for an overfunded plan) or debit (for an underfunded plan) is to Other Comprehensive Income. D. Notes to the financial statements provide information about investments made by the retirement trust and how trust assets and liabilities changed during a period.E. all of the above

148. Which of the following is/are not true? A. An employer must recognize changes in the funded status of a defined benefit retirement plan on its balance sheet each period. B. U.S. GAAP and IFRS require the employer to recognize changes in the funded status of a defined benefit retirement plan immediately in net income. C. Changes in the net funded status of a defined benefit retirement plan because investment performance differs from expectations, or because of changes in actuarial assumptions, or in the retirement benefit formula, initially affect other comprehensive income. D. Firms amortize the amounts in Other Comprehensive Income over the expected period of benefit as an adjustment to retirement plan cost. E. all of the above

149. U.S. GAAP and IFRS provide criteria for distinguishing operating leases from capital leases. Which of the following is/aretrue? A. Under the capital, or finance, lease method, the lessor records the signing of a capital lease the same as if the lessor sold the leased asset for an installment note receivable. B. Under the capital, or finance, lease method, the lessee recognizes interest expense on the lease liability, similar to recognizing interest expense on long-term notes or bonds.C. Under the capital, or finance, lease method, the lessee amortizes the leased asset, similar to recognizing depreciation on buildings and equipment.D. Under the capital, or finance, lease method, the lessee records the leased asset and the lease liability on the balance sheet at the present value of the contractual cash flows at the time of signing the lease. E. all of the above

150. U.S. GAAP and IFRS provide criteria for distinguishing operating leases from capital leases. Which of the following is not true? A. The criteria attempt to identify the entity, whether lessor or lessee, that enjoys the benefits and incurs the risk of the leased asset. B. When the lessor enjoys the benefits and bears the risk, the lease is an operating lease.C. When the lessee enjoys the benefits and bears the risk, the lease is a capital lease. D. IFRS provides more general criteria for identifying the entity enjoying the rewards and incurring the risk. E. Firms can currently apply the fair value option to capital leases