Mod 19 Wrong Answers Flashcards Preview

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Flashcards in Mod 19 Wrong Answers Deck (13)
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0
Q

Economic characteristics and risks of the embedded instrument are not clearly and closely…

A

Related to those of host contract

1
Q

Hybrid instrument is not recorded…

A

At fair value

2
Q

An embedded derivative must meet the definition of…

A

A derivative instrument

3
Q

Hedge accounting is permitted for what 4 types of hedges?

A

1 unrecognized firm commitments
2 available for sale securities
3 foreign currency denominated hedge forecasted transactions
4 net investments in foreign operations

4
Q

What are the 2 general criteria for a hedging instrument?

A

1 sufficient documentation must be provided at beginning of
Process

2 hedge must be highly effective throughout its life

5
Q

4 foreign currency hedges

A

1 unrecognized firm commitment
2 available for sale security
3 foreign currency denominated forecasted transaction
4 net investment in foreign operations

6
Q

Hedge of a recognized asset or liability is…

A

A fair value hedge or cash flow hedge

7
Q

3 disclosures required about credit risk for financial instruments with off balance sheet credit risk

A

1 amount of accounting loss entity would incur should any
Party to financial instrument fail to perform
2 class of financial instruments held
3 categorization btw/ instruments held for trading purposes and
Purposes other than trading

8
Q

Concentrations of credit risk exist when an entity has…

A

A business activity, economic characteristic or location that is
Common to most of its financial instruments

9
Q

Disclosure of information about significant concentrations of credit risk for…

A

All financial instruments is required

10
Q

Forward contract

A

Agreement between 2 parties to buy and sell specific quantity
Of commodity, foreign currency or financial instrument

At agreed upon price with delivery or settlement at designated
Future date

11
Q

Futures contract

A

Forward based contract to make or take delivery of a designated
Financial instrument, foreign currency or commodity

During a designated period at a specified price or yield

12
Q

Futures contracts frequently have provisions for…

A

Cash settlement