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CA Final Ind AS 113 Fair Value Measurement — practice questions — page 2

Explore 84 free Ind AS 113 Fair Value Measurement questions in CA Final Financialreporting. Open each question or exercise to read its content, reference answers and available explanation.

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Ind AS 113 Fair Value Measurement questions and exercises with answers

Showing questions 31–60 of 84.

The location or size of a property relates to which highest and best use test?Read the answer and worked solution →A use is financially feasible when income givesRead the answer and worked solution →Which use of a non-financial asset is presumed to be its highest and best use?Read the answer and worked solution →Highest and best use is determined from whose perspective?Read the answer and worked solution →A firm buys a brand and plans to shelve it. Its fair value is measuredRead the answer and worked solution →Best use is combined with other assets. Fair value assumes those assets areRead the answer and worked solution →Which liabilities go with a group of assets in the valuation premise?Read the answer and worked solution →For a non-financial asset, fair value is assumed sold on theRead the answer and worked solution →Fair value of a liability assumes it isRead the answer and worked solution →Under the transfer assumption for a liability, the transfereeRead the answer and worked solution →Fair value of a liability reflects the effect ofRead the answer and worked solution →Non-performance risk is assumed to be what before and after a liability's transfer?Read the answer and worked solution →A liability has a separately accounted guarantee. The issuer usesRead the answer and worked solution →A liability cannot be transferred. For fair value the entity shouldRead the answer and worked solution →A demand deposit of Rs 50 lakh is payable on demand. Its fair value isRead the answer and worked solution →An exception lets an entity measure a portfolio of financial instruments on the basis of itsRead the answer and worked solution →The net-exposure exception requires the entity to manage the group per itsRead the answer and worked solution →The net-exposure exception applies only to contracts within the scope ofRead the answer and worked solution →Using the net-exposure exception is an accounting policy decision under which standard?Read the answer and worked solution →A transaction price is the price paid to acquire an asset. This is anRead the answer and worked solution →At initial recognition a gain from price versus fair value goes toRead the answer and worked solution →Which situation may make transaction price differ from fair value?Read the answer and worked solution →A related party deal price can still be an input to fair value if the entity has evidenceRead the answer and worked solution →A dealer sells at retail but exits in the dealer market. Why might price differ?Read the answer and worked solution →Which three valuation approaches are widely used under Ind AS 113?Read the answer and worked solution →Valuation techniques under Ind AS 113 must maximise the use ofRead the answer and worked solution →Calibration of a technique using unobservable inputs ensures that at initial recognition the result equalsRead the answer and worked solution →A change in valuation technique is appropriate if it gives a measurement that isRead the answer and worked solution →A change in valuation technique is accounted for as aRead the answer and worked solution →The market approach uses prices from transactions involvingRead the answer and worked solution →

Worked practice questions

The location or size of a property relates to which highest and best use test?

  1. Legally permissible
  2. Financially feasible
  3. Market approach
  4. Physically possible
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Correct answer: D. Physically possible

Location and size are physical characteristics that market participants take into account when pricing a property.

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A use is financially feasible when income gives

  1. A guaranteed profit
  2. A zero tax charge
  3. A return above WACC
  4. A return buyers require
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Correct answer: D. A return buyers require

Financial feasibility means income or cash flows, after conversion costs, give the return market participants would require.

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Which use of a non-financial asset is presumed to be its highest and best use?

  1. The entity's current use
  2. The use with the highest rent
  3. The use a competitor prefers
  4. The use shown in the budget
Show answer and solution

Correct answer: A. The entity's current use

Current use is presumed to be highest and best use unless market factors suggest another use would maximise value.

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More Financialreporting topics

Ind AS 116 LeasesInd AS 36 Impairment of Assets and Ind AS 38 Intangible AssetsInd AS 24 Related Party Disclosures and Ind AS 108 Operating SegmentsInd AS 1 Presentation of Financial StatementsInd AS 12 Income TaxesInd AS 109 Financial InstrumentsInd AS 23 Borrowing Costs and Ind AS 40 Investment PropertyInd AS 103 Business Combinations