The Former AASB 1014 Required That If a Trust Was

question 47

Multiple Choice

The former AASB 1014 required that if a trust was established to assume the responsibility for a debt in an insubstance debt defeasance,that trust must:

• A) Be under the control of the debtor entity and have enough securities issued by a credit-worthy government to ensure that there is a very low probability that the debtor entity will have any further obligation in relation to the debt.
• B) Be a company set up under the relevant state and federal statutes to administer the risk-free assets that are to be used to release the debtor entity from the primary obligation for the debt.
• C) Have risk-free assets irrevocably transferred to it, which are of a type suited to the amount and timing so as to meet the servicing requirements of the debt..
• D) Be a government-guaranteed financial institution that is required to report annually to the Australian Securities and Investments Commission.
• E) None of the given answers.

---

Definitions:

Credo

A statement of the beliefs or aims that guide someone's actions.

Final Responsibility

The ultimate accountability for an action or decision, typically held by a leader or highest authority in an organization.

Conducting Business

The act of engaging in activities that produce goods or services to satisfy consumer demand and generate profit.

Transparency

The practice of being open, honest, and straightforward about various activities, making information accessible and understandable to stakeholders.