In Undertaking a Liquidity Adequacy Test,if the Present Value of Future

question 42

Multiple Choice

In undertaking a liquidity adequacy test,if the present value of future claims exceeds the unearned premium liability:

• A) The difference must be recorded as an asset under AASB 1023.
• B) A further liability should be recorded to 'make up' the deficiency.
• C) An expense should be recorded by initially writing down any related intangible assets.
• D) A further liability should be recorded to 'make up' the deficiency and an expense should be recorded by initially writing down any related intangible assets.
• E) None of the given answers.

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