Seizure of Collateral Is One Possible Remedy for Breach of Covenant

question 54

True/False

Seizure of collateral is one possible remedy for breach of covenant restrictions.

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Definitions:

Fair Value

The estimated market value of an asset or liability, based upon current conditions and mutually informed and willing parties.

Long-Term Investments

Assets that a company intends to hold for more than one year, such as stocks, bonds, or real estate.

Unrealized Gain

An unrealized gain is an increase in the value of an investment or asset that has not been sold, and consequently, the profit has not yet been taken or considered as income.

Fair Value Adjustment

Fair value adjustment involves altering the reported value of a company's assets or liabilities to reflect their current market values.