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XY purchased $100,000 of quoted 8% bonds in the current year which it intends to hold until redemption.
Which of the following identifies the correct classification and subsequent measurement basis for this financialinstrument?
Suggested Answer: A
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31 comments · newest first
KI
Kiley
11 months ago
B makes the most sense, no doubt about it!
LA
Lavera
11 months ago
Surprised it's not A, thought loans and receivables fit better!
AN
Annabelle
11 months ago
Wait, are we sure it's not C?
CH
Chaya
12 months ago
I agree, B is the right choice!
LO
Louis
12 months ago
Definitely B, held to maturity and measured at amortised cost.
CA
Caprice
12 months ago
I believe the answer is B, since we intend to hold the bonds until redemption, but I’m not completely confident about the measurement part.
NO
Noe
1 year ago
I’m a bit confused about the difference between amortised cost and fair value. I feel like I might have mixed them up in my notes.
EL
Elfrieda
1 year ago
I remember practicing a similar question where we had to identify the measurement basis for financial assets. I think "held to maturity" is definitely the right classification here.
SA
Salina
1 year ago
I think this is about how bonds are classified, but I'm not sure if "held to maturity" means they get measured at amortised cost.
AL
Alline
1 year ago
This is a tricky one. There are a few different factors to consider, like the intent to hold the bonds until redemption. I'll need to carefully read through the question and review the accounting standards to make sure I select the correct answer.
MA
Malcom
1 year ago
Okay, I think I've got this. Based on the information provided, the bonds would be classified as a "held to maturity" financial asset, which should be subsequently measured at amortized cost. I'll double-check my work, but I'm feeling confident about option B.
RA
Raylene
1 year ago
Hmm, I'm a bit unsure about this one. The question is asking about the classification and measurement, but there are a few different options. I'll need to review the definitions of the different financial asset categories to determine the right answer.
MI
Micaela
1 year ago
This looks like a straightforward classification and measurement question for financial instruments. I'll need to carefully consider the details provided about the bonds and the relevant accounting standards.
EV
Evan
2 years ago
I thought this was a test about buying and selling bonds, not a game of 'which answer is the least wrong'.
CI
Ciara
1 year ago
D) A held to maturity financial asset subsequently measured at fair value with gains and losses in reserves.
SE
Sena
1 year ago
C) A loans and receivables financial asset subsequently measured at amortised cost.
CA
Catina
1 year ago
B) A held to maturity financial asset subsequently measured at amortised cost.
SO
Son
1 year ago
A) A loans and receivables financial asset subsequently measured at fair value with gains and losses in reserves.
KE
Keva
2 years ago
I'm just glad I don't have to worry about all these accounting rules and regulations. I'd much rather be an astronaut or a professional wrestler.
NI
Nicolette
2 years ago
I'm going to go with option C. Amortized cost seems like the appropriate measurement basis for this type of instrument.
SH
Shanda
1 year ago
User 2: Yeah, I agree. It's important to consider the classification and measurement basis for financial instruments.
BE
Benton
1 year ago
User 1: I think option C is the correct one too. Amortised cost makes sense for bonds.
MA
Malcolm
2 years ago
I'm not sure, but I think option D) A held to maturity financial asset subsequently measured at fair value with gains and losses in reserves could also be a possibility.
BR
Britt
2 years ago
I'm not sure why anyone would even consider options A or D. Those are just blatantly wrong for this scenario.
DE
Devorah
1 year ago
So it's settled then, option B) is the correct classification and subsequent measurement basis for the financial instrument.
MA
Mable
1 year ago
Definitely not A) or D), they don't fit the situation at all.
IO
Iola
1 year ago
I agree, option B) seems to be the most appropriate for this scenario.
DO
Dominic
1 year ago
I think the correct classification is B) A held to maturity financial asset subsequently measured at amortised cost.
LA
Lashawn
2 years ago
This is clearly a held-to-maturity financial asset that should be measured at amortized cost. Option B is the correct answer.
AN
Anna
2 years ago
I agree with Adelaide. Holding the bonds until redemption indicates they are held to maturity and should be measured at amortised cost.
AD
Adelaide
2 years ago
I think the correct classification is B) A held to maturity financial asset subsequently measured at amortised cost.