244 / 488
Chapter
24 /
Financial Instruments: Presentation
(lAS
32)
8. What is the accounting for treasury share transac–
tions?
(a) On repurchase of treasury shares. a gain or
loss is recognized equal to the difference
between the amount at which the shares
were issued and the repurcha se price for the
shares.
(b) On reissuance of treasury shares, a gain or
loss is recognized equal to the difference
between the previous repurchase price and
the reissuance price.
(c) On repurchase or reissuance of previously
repurchased own shares , no gain or loss is
recognized .
(d) Treasury shares are accoun ted for as finan-
cial assets in accordance with lAS 39.
Answer : (c)
9. What are the conditions for offsetting (net
presentation) of financial assets and financial liabili–
ties?
(a) A legal right of set-off.
(b) A legal right of set-off and an intention to
settle net or simultaneously.
(c) The existence of a clearing mechanism or
other market mechanism for net settlement
and an expectation of net settlement.
(d) A netting agreement and an expectation of
net settlement.
Answer : (b)
235