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Year Interest Received Interest Income Discount Amortization Amortized Cost 2008 2009 2010 2011 2012
Year Interest Received Interest Income Discount Amortization Amortized Cost 2008 2009 2010 2011 2012
ANSWER: D
The decrease in fair value of the debt instrument classified as available-for-sale should
be recognized as unrealized loss and classified as component of other comprehensive
income.
ANSWER: C
Decrease in fair value in 2010 P200,000
Unrealized loss recognized in 2009 100,000
Impairment loss P300,000
4. The amount of reversal of impairment loss to be recognized in profit and loss in
2011 is
a. P100,000
b. P200,000
c. P 15,000
d. P 0
ANSWER: C
PAS 39 permits recognition of reversal of impairment loss for available-for-sale debt
security.
ANSWER: A
At the end of 2011, available-for-sale debt security should be stated at its fair value of
P715,000 (P1,000,000 – P100,000 – P200,000 + P15,000).