SBR Financial instruments

Under IFRS 9, a debt instrument held to collect contractual cash flows that are solely payments of principal and interest is measured at:

• 1 Cost less impairment only
• 2 Amortised cost
• 3 Fair value through profit or loss
• 4 Fair value through OCI always

A loan note is issued at $95,000 net of costs, with a nominal value of $100,000, a coupon of 5 percent and an effective rate of 8 percent. The liability at the end of year 1 is:

• 1 $100,000
• 2 $97,600
• 3 $102,600
• 4 $95,000

An equity investment not held for trading can be designated at initial recognition at:

• 1 Fair value through profit or loss only
• 2 Amortised cost
• 3 Fair value through other comprehensive income, irrevocably
• 4 Cost

In the general expected credit loss model, lifetime losses are recognised when:

• 1 Credit risk has increased significantly since initial recognition
• 2 The asset is derecognised
• 3 Credit risk is low
• 4 The asset is first recognised

In a cash flow hedge, the effective portion of the gain or loss on the hedging instrument is recognised in:

• 1 Other comprehensive income
• 2 Goodwill
• 3 Profit or loss immediately
• 4 Retained earnings directly

For a convertible bond, the equity component is measured as:

• 1 The coupon
• 2 The market value of the shares
• 3 The nominal value of the shares
• 4 The proceeds less the fair value of the liability component

A quoted price for an identical asset in an active market is which level of the IFRS 13 fair value hierarchy?

• 1 Level 3
• 2 Level 2
• 3 Level 1
• 4 Level 0

A financial liability is derecognised when:

• 1 The company has paid half of it
• 2 The liability is more than a year old
• 3 The creditor becomes a shareholder
• 4 It is extinguished, because the obligation is discharged, cancelled or has expired