Which of the Following Statement Is Incorrect Regarding How the IASB

question 22

Multiple Choice

Which of the following statement is incorrect regarding how the IASB requires that the impairment assessment be performed?

• A) Receivables that are individually significant should be considered for impairment separately, if impaired, the company recognizes it.
• B) Receivables that are not individually significant are assessed individually. If impaired, the company recognizes it.
• C) Any receivable individually assessed that is not considered impaired should be included with a group of assets with similar credit-risk characteristics and collectively assessed for impairment.
• D) Any receivables not individually assessed should be collectively assessed for impairment.

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Definitions:

Premium Amortization

The gradual reduction of the premium paid above the face value of a bond, allocated over the life of the bond.

Bond Premium

The difference between the selling price of a bond and the bond’s face value when the bond is sold for more than par.

Effective-Interest Amortization

A method of amortizing a bond discount or bond premium that reflects the effective interest rate a company pays bondholders over the life of a bond.

Coupon Interest Rate

The annual interest rate paid by a bond expressed as a percentage of its face value.