The Pattern of Revenue Recognition Required by AASB 1023 Is

question 19

Multiple Choice

The pattern of revenue recognition required by AASB 1023 is:

• A) As premiums become due and payable, the revenue should be recognised according to accrual principles.
• B) In accordance with the pattern of past receipts from policies of a similar type.
• C) Based on the discounted cash flows expected to be associated with the policy, using past experience of policies that are in the same category.
• D) Based on the pattern of risk to which the insurer is exposed.
• E) None of the given answers.

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Definitions:

Event

An occurrence or happening, especially one of significance.

Law of Small Numbers

A cognitive bias that leads people to make unjustified conclusions based on limited data.

Risks

The potential for losing something of value, or the uncertainty regarding the outcome of an action or decision.

Probability

The likelihood or chance of an event occurring, often expressed as a number between 0 and 1.