FR B Financial instruments and leasing

A redeemable preference share is normally classified as:

• 1 A financial liability
• 2 Revenue
• 3 A contingent asset
• 4 Equity

Which measurement applies to a financial liability held for trading?

• 1 Cost less impairment
• 2 Fair value through other comprehensive income
• 3 Amortised cost
• 4 Fair value through profit or loss

Debt is issued for net proceeds of $95,000 with an effective rate of 6 percent and a coupon of $4,000. What is the finance cost for year 1?

• 1 $4,000
• 2 $1,700
• 3 $5,000
• 4 $5,700

Debt is issued for net proceeds of $95,000 with an effective rate of 6 percent and a coupon of $4,000. What is the carrying amount at the end of year 1?

• 1 $99,000
• 2 $95,000
• 3 $100,000
• 4 $96,700

A lessee recognises at the start of a lease:

• 1 A right-of-use asset and a lease liability
• 2 Only an expense
• 3 Nothing
• 4 Only a liability

A 3-year lease has annual payments in arrears of $10,000 and a discount rate of 8 percent. What is the lease liability at the start, to the nearest dollar?

• 1 $30,000
• 2 $27,000
• 3 $25,771
• 4 $24,000

A 3-year lease has a liability at the start of $25,771 and a discount rate of 8 percent. What is the interest charge in year 1, to the nearest dollar?

• 1 $2,577
• 2 $800
• 3 $2,000
• 4 $2,062

Which leases can a lessee exempt from recognition on the statement of financial position?

• 1 All leases of land
• 2 Leases of motor vehicles
• 3 All leases with a related party
• 4 Leases of 12 months or less, and leases of low-value assets

Receivables are factored with recourse, so the entity keeps the risk of non-payment. How are they treated?

• 1 They are shown as revenue
• 2 They are derecognised
• 3 They remain on the statement of financial position with a liability for the advance
• 4 They are written off