AASB 1023 Requires Which Discount Rate to Be Applied to an Outstanding

question 45

Multiple Choice

AASB 1023 requires which discount rate to be applied to an outstanding claims liability?

• A) Weighted average cost of financing for the particular insurer.
• B) Market-determined risk-adjusted rate of return for the particular insurer.
• C) Risk-free discount rates based on current observable and objective rates.
• D) High quality corporate bond rates.
• E) None of the given answers.

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Definitions:

Real GDP

The measure of a country's economic output adjusted for inflation, reflecting the true value of goods and services produced.

Loanable Funds

A concept in economics that describes the market where borrowers obtain funds from savers, influenced by interest rates.

Interest Rates

The cost of borrowing money, expressed as a percentage of the amount borrowed, paid by the borrower to the lender for the use of their funds.

National Debt

The complete value of funds that a nation's administration has accrued as debt through various methods.