FINANCIAL INSTRUMENT:

PAS 32, pg. 11, defines financial instruments as any contract that gives rise to a
financial asset of one entity and a financial liability or an equity instrument of
another entity.
FINANCIAL ASSETS, DEFINED AS:
Cash
Contractual right to receive cash or other FA (AR)
Contractual right to exchange Fin. Instrument that are favorable to us
Examples of Financial Assets:
Cash
Receivables
Investments in Securities
FINANCIAL LIABILITY: any liability that is:
a contractual obligation:
to deliver cash or another financial asset to another entity; or to exchange
financial assets or financial liabilities with another entity under conditions that
are potentially unfavourable to the entity;
I and II only
P21-26
Case 1:
Classified as FVPL No. 21
Initial Measurement 922,768

Face amount of the bonds 1,000,000

x nominal rate 4%
Interest Income, 06/30/2022 40,000

Face amount of the bonds 1,000,000

x nominal rate 4%
Interest Income, 12/31/2022 40,000
Interest Income, year 2022 80,000 No. 22

Case 2:
Classified as FAAC
4% 5%
Date Interest Receivable Interest Income Amortization
2/1/2022
06/30/2022 40,000 46,138 6,138
12/31/2022 40,000 46,445 6,445
06/30/2023 40,000 46,768 6,768
12/31/2023 40,000 47,106 7,106
04/30/2024 26,667 31,641 4,974

Investment CA, 12/31/2022 935,352 No. 23

Unrealized Gain/Loss on FV changes 0 No. 24 No mark-to-market when the investm
Case 3:
Classified as FVOCI

Beginning Balance 922,768

Add: Amortization, 2022 12,584
Unrealized gain-OCI 54,648 Squezzed
FV, 12/31/2022 990,000
Add: Amortization, 2023 13,874
Unrealized gain-OCI 16,126 Squezzed
FV, 12/31/2023 1,020,000
Add: Amortization, 04/30/2024 4,974
CA, 04/30/2024 1,024,974

UGL-OCI
12/31/2022 54,648
12/31/2023 16,126
Cumulative, 12/31/2022 70,775 No.25

Proceeds 980,000
Less: CA, 04/30/2024 1,024,974
- 44,974
Add: Cumulative gain 70,775
Gain on sale 25,801 No. 26

P.27-28

Proceeds 1,000,000
CA, 12/31/2021 1,100,000
Loss on sale -100,000 No. 27

Market Value, Dec. 31, Market Value, Dec.

Security Cost 2020 31, 2021
1 600,000 540,000 560,000
2 460,000 500,000 600,000
4 700,000 840,000 760,000
5 500,000 540,000 600,000
6 300,000 360,000 380,000
7 600,000 520,000 700,000

P.29
Investment held for trading:
Cost Market UGL
AA 80,000 50,000 -30,000
BB 15,000 20,000 5,000
UGL charged to Income -25,000

Investment held at FVOCI

Cost Market UGL
QQ 60,000 70,000 10,000
RR 90,000 45,000 -45,000
UGL charged to Equity -35,000

P. 30-33
FAAC PV Factors Present Values
Principal 4,000,000 0.735 2,940,000
Interest Receivable 400,000 3.3121 1,324,840
Initial Measurement 4,264,840
8%
Date Interest Receivable Interest Income Amortization
1/1/2022
12/31/2022 400,000 341,187 58,813
12/31/2023 400,000 336,482 63,518
12/31/2024 400,000 331,401 68,599

Interest Income, 12/31/2022 341,187 No. 30

CA, 12/31/2022 4,206,027 No. 31
No amount must be reported in OCI (FAAC) (0) No. 32
Interest Income, 12/31/2023 336,482 No. 33

Owned shares on PS 20,000

Total PS of EB 200,000
Interest on PS 10%
Declared dividends on PS 2,400,000
Dividend Income 240,000 No. 34

Share dividend is not recognized as a dividend income

I and II only No. 35

Cost 4,918,000
Less: Accrued Interest 50,000
Initial Investment 4,868,000
Face Value 5,000,000
Discount 132,000
# of months 44
Amortization of discount/month 3,000
Amortization for 2022, 8 mos 24,000
Amortization for 2023 36,000

Face Value 5,000,000

x NIR 12%
Interest Received, 2022 400,000
Amortization of discount 24,000
Interest Income 376,000

P.36-40
Only the property dividend will be considered as dividend income

Fair value of property dividend 1,500,000

Ray's interest 10% 100k / 10k shares
Dividend Income 150,000 No. 36

All of the statements are correct No. 37

Dividend received from Nezuko is a deduction from the investment since it is an IIA
Share dividend received from Zinetsu is not recognized as income by Tanjiro
The share dividend will not affect the total peso amount of the investment of Tanjiro, only the number of s

No dividend income for Tanjiro (0) No. 38

Kenjaku, NI 350,000
PS dividends 125,000 100k x 5% x @25 per share
NI, distributable to OS 225,000
Gojo's intrest (20,000/200,000) 10%
Gojo's Dividend Income 22,500 No. 39

Kenjaku, NI 350,000
Gojo's share 30%
Increase in investment 105,000 No. 40

P. 41-43
Dividend declared 1,000,000 paid dividends
Saitama's % share 10%
Investment income 100,000 No. 41

Genos, NI 8,000,000 2021, N.I

Depreciation of Equipment 800,000 CA: 4M/5yrs
Adjusted NI 7,200,000
Saitama's % share 25% Percentage, (2020 10%, 2021 15%)
Share in Net Income 1,800,000
Increase In Old Investment, FV changes 1,000,000 4M (2020) , 5M (2021)
Total Income to be reported 2,800,000 No. 42

FV of the 10% share 4,000,000

Cost of the 15% share 8,500,000
Beginning Balance, 01/01/2021 12,500,000
Add: Share in Net Income 1,800,000
Less: Share in Dividends 1,250,000 (5M x 25%)
CA, 12/31/2021 13,050,000 No. 43

P. 44-46
Unadj. CA of the Net Assets 4,500,000
Add: Undervalued plant 450,000 1M - 550K
Add: Undervalued inventory 50,000 175K-125K
FV of Net Assets 5,000,000
Interests bought 30%
FV of NI, bought 1,500,000

Cost of the investment 2,100,000

Less: FV of NI, Bought 1,500,000 1.750K + 350K
Goodwill 600,000 No. 44

Investee, NI 600,000 Good will

Less: Depreciation of Plant 45,000 1M - 550K / 10yrs
Less: Inventory sold 50,000 175k - 125k
Adjusted, NI 505,000
% Share 30%
Inv Inc in 2022 151,500 No. 45

Cost of the investment 2,100,000 1.750k + 350k

Inv in Inc, 2022 151,500
Less: Share in Dividend - 30,000 Cash Div / 30%
CA, investment 12/31/2022 2,221,500 No. 46

P.47-48
MV Fraction
Tito 16000 800,000 16%
Vic 32000 2,400,000 48%
Joey 2000000 1,800,000 36%
5,000,000
P. 49-50

Date Int. Receivable Int. Income Amortization

1/1/2021
12/31/2021 160,000 190,050 30,050
12/31/2022 160,000 193,055 33,055

FV, 01/01/2022 2,200,000 F.A 2M x 110%

CA, 12/31/2021 1,930,550 2nd CA, 2021
UG charged to OCI 269,450 No. 49

Interest Income, 2022 193,055 No. 50

 Carrying Amount
922,768
928,906
935,352
942,119
949,225
954,199

to-market when the investment is classified as FAAC

UGL-P/L
20,000
100,000
-80,000
60,000
20,000
180,000
300,000 No. 28
Carrying Amount
4,264,840
4,206,027
4,142,509
4,073,910

|
Tanjiro, only the number of shares.
Allocation
984,000 No. 47
2,952,000
2,214,000 No. 48
6,150,000
Carrying Amount
1,900,500
1,930,550
1,963,605