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CA Final Ind AS 32 Financial Instruments: Presentation — practice questions

Explore 56 free Ind AS 32 Financial Instruments: Presentation 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 32 Financial Instruments: Presentation questions and exercises with answers

Showing questions 1–30 of 56.

What is a financial instrument?Read the answer and worked solution →Equity instruments evidence what interest?Read the answer and worked solution →Shares of another company held as an investment are a what?Read the answer and worked solution →A bank loan taken is a financial liability because?Read the answer and worked solution →A derivative linked to a subsidiary interest is?Read the answer and worked solution →A net-settleable commodity contract is generally?Read the answer and worked solution →Own-use copper purchase, never netted, is?Read the answer and worked solution →Habitually net-settled commodity contracts are?Read the answer and worked solution →A net-settleable written option on goods is?Read the answer and worked solution →Ind AS 32 classifies financial instruments from whose perspective?Read the answer and worked solution →An issuer classifies an instrument by its?Read the answer and worked solution →A preference share must be redeemed for Rs 100 after five years. How is it classified?Read the answer and worked solution →Pref shares redeemable at the holder's option are?Read the answer and worked solution →Shares with fully discretionary dividends and no redemption duty are usually what?Read the answer and worked solution →Equity classification needs which two conditions?Read the answer and worked solution →Cannot avoid paying cash: classified as?Read the answer and worked solution →Coupon needs regulator approval. Obligation is?Read the answer and worked solution →An obligation arises only if the holder exercises a redemption right. It is what?Read the answer and worked solution →Settles in cash or shares worth far more. Classified as?Read the answer and worked solution →A contract settled in own shares is?Read the answer and worked solution →Option to buy 1,000 own shares at fixed Rs 50 each is?Read the answer and worked solution →Issue shares worth Rs 1 crore, count varies. Classified?Read the answer and worked solution →A forward buyback of own shares creates a liability at?Read the answer and worked solution →Cash due if a stock index falls. Classified as?Read the answer and worked solution →A contingent cash clause is ignored if due only on?Read the answer and worked solution →Settlement-choice derivative is a liability unless?Read the answer and worked solution →Issuer may net-settle a share option in cash. It is?Read the answer and worked solution →A bond convertible into fixed shares is?Read the answer and worked solution →The equity component of a convertible bond is like what?Read the answer and worked solution →A compound instrument's equity part is measured as?Read the answer and worked solution →

Worked practice questions

What is a financial instrument?

  1. A contract creating asset and liability
  2. A physical asset held for resale
  3. A tax payable to the government
  4. An intangible right from a merger
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Correct answer: A. A contract creating asset and liability

A financial instrument is a two-sided contract: it is a financial asset for one party and a financial liability or equity instrument for the other.

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Equity instruments evidence what interest?

  1. A fixed claim on cash due
  2. A residual interest after liabilities
  3. Priority over secured lenders
  4. A right to contractual interest
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Correct answer: B. A residual interest after liabilities

Equity holders rank last: they own whatever remains of the assets once every liability has been deducted.

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Shares of another company held as an investment are a what?

  1. Financial liability
  2. Treasury share
  3. Financial asset
  4. Non-financial asset
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Correct answer: C. Financial asset

An equity instrument of another entity falls directly within the list of financial assets.

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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 113 Fair Value MeasurementInd AS 109 Financial InstrumentsInd AS 23 Borrowing Costs and Ind AS 40 Investment Property