The amount of fair value changes taken to equity as at 31 December 20x5 was: (a) $10,000
Question:
The amount of fair value changes taken to equity as at 31 December 20x5 was:
(a) $10,000
(b) $20,000
(c) $60,000
(d) $70,000
(e) None of the above Alpha Corporation had the following transactions in 20x5:
Transcribed Image Text:
Date 1 January 20x5 1 July 20x5 Transaction Bought 100,000 units of shares of Company X at the market price of $3.80 per share. Alpha Corporation classified the investment as FVOCI Purchased a put option, which gave it the right but not the obligation to sell 100,000 units of shares of Company X at a price of $4.50 which was the prevailing market price. Alpha paid a premium of $12,000 for the put option. The put option expired on 30 September 20x5. Alpha Corporation classified the put option as a fair value hedge of its investment in Company X. Hedge effectiveness was measured based on the ratio of the cumulative
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Answer To determine the amount of fair value changes taken to equity as at 31 December 20x5 we need to consider the fair value changes related to the ...View the full answer
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Related Book For
Advanced Financial Accounting An IFRS Standards Approach
ISBN: 9781285428765
4th Edition
Authors: Pearl Tan, Chu Yeong Lim, Ee Wen Kuah
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