Podcast
Questions and Answers
How are loan receivables generally similar to notes receivable?
How are loan receivables generally similar to notes receivable?
- Both are primarily used by insurance and pawnshop companies.
- Both exclusively involve lending of physical assets rather than money.
- Both are initially measured at fair value less transaction costs.
- Both are claims supported by a formal promise to pay a sum of money. (correct)
Which entities are most likely to use the term 'loans receivable'?
Which entities are most likely to use the term 'loans receivable'?
- Entities involved in short-term financing arrangements only.
- Companies whose main operations involve selling goods on credit.
- Entities whose main operations involve lending money. (correct)
- Individuals seeking personal loans from banks.
What is the primary difference in accounting treatment between loans receivable and notes receivable?
What is the primary difference in accounting treatment between loans receivable and notes receivable?
- Loans receivable are always measured at amortized cost, while notes receivable are at fair value.
- Loan transactions typically involve transaction costs, while notes receivable do not. (correct)
- Notes receivable are subject to impairment testing, while loans receivable are not.
- There is no difference; they follow identical accounting principles.
According to the definition, what distinguishes transaction costs from other costs?
According to the definition, what distinguishes transaction costs from other costs?
When are receivables initially measured, considering transaction costs?
When are receivables initially measured, considering transaction costs?
What is the significance of 'incremental' in the definition of transaction costs?
What is the significance of 'incremental' in the definition of transaction costs?
Which of the following is the MOST accurate description of transaction costs related to financial instruments?
Which of the following is the MOST accurate description of transaction costs related to financial instruments?
Which accounting standard provides guidance on financial instruments?
Which accounting standard provides guidance on financial instruments?
What is the objective of accounting for the impairment of receivables?
What is the objective of accounting for the impairment of receivables?
Why is it important to properly account for origination costs and fees related to receivables?
Why is it important to properly account for origination costs and fees related to receivables?
Which of the following activities would NOT be considered a transaction cost related to a loan receivable?
Which of the following activities would NOT be considered a transaction cost related to a loan receivable?
In what scenario is the derecognition of a receivable appropriate?
In what scenario is the derecognition of a receivable appropriate?
According to the material provided, which of the following standards relates to revenue from contracts with customers?
According to the material provided, which of the following standards relates to revenue from contracts with customers?
An entity provides a loan to a customer. Which costs would be included in the initial measurement of the loan receivable?
An entity provides a loan to a customer. Which costs would be included in the initial measurement of the loan receivable?
An entity factors its receivables without recourse. How does this affect the accounting treatment?
An entity factors its receivables without recourse. How does this affect the accounting treatment?
What is the primary focus of PFRS 9?
What is the primary focus of PFRS 9?
An entity originates a loan and charges the borrower an origination fee. How should this fee be accounted for?
An entity originates a loan and charges the borrower an origination fee. How should this fee be accounted for?
Which situation indicates that a loan receivable is impaired?
Which situation indicates that a loan receivable is impaired?
How does the accounting treatment differ if a loan receivable is sold with recourse versus without recourse?
How does the accounting treatment differ if a loan receivable is sold with recourse versus without recourse?
Under what condition should an entity derecognize a financial asset?
Under what condition should an entity derecognize a financial asset?
Flashcards
Loans Receivable
Loans Receivable
A claim supported by a formal promise to pay a sum of money at a specific future date, typically used by entities whose main operations involve lending money.
Transaction Costs
Transaction Costs
Incremental costs directly attributable to the acquisition, issue, or disposal of a financial asset or liability that would not have been incurred otherwise.
Initial Measurement of Receivables
Initial Measurement of Receivables
Accounting principle that receivables are initially recorded at their fair value, with any associated transaction costs added to this value.
PFRS 9
PFRS 9
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PFRS 15
PFRS 15
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PAS 32
PAS 32
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Study Notes
- Algorithmic trading involves using a computer program that follows a defined algorithm to execute trades.
- It is also referred to as automated trading, black-box trading, or algo-trading.
- Algorithmic trading can generate profits faster and more frequently than a human trader.
Usage of Algorithmic Trading
- Algorithmic trading helps in executing trades at the best possible prices, leading to reduced costs.
- Backtesting algorithms on historical data helps reduce risk by assessing the viability of a trading strategy.
- It eliminates emotional and psychological factors from trading decisions.
- Algorithmic trading enables diversification by automatically trading across multiple markets.
- It improves speed by executing trade orders rapidly.
- This approach enhances accuracy by minimizing manual errors in trade placement.
Strategies in Algorithmic Trading
- Trend Following aims to profit from stocks trending in a specific direction.
- Mean Reversion involves betting on stocks reverting to their average price after deviating.
- Arbitrage exploits small price differences in different markets.
- Index Fund Rebalancing anticipates and leverages predictable trades made by index funds.
- Mathematical Model strategy uses mathematical models to identify trading opportunities.
- Trading Range strategy involves buying at support levels and selling at resistance levels.
- Delta-Neutral Strategies are designed to offset positive and negative changes in price.
Trend Following Algorithm Example
- The following Python code represents a simple trend-following algorithm:
- It uses
yfinanceto obtain stock data andtalibfor technical indicators. initialize(context)sets the stock symbol (AAPL) and the moving average period (20 days).handle_data(context, data)is executed daily.- It retrieves historical prices for the previous 20 days.
- Calculates the Simple Moving Average (SMA).
- Obtains the current stock price.
- It buys the stock if the current price exceeds the SMA and the portfolio doesn't already hold the stock.
- It sells the stock if the current price falls below the SMA and the portfolio holds the stock.
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