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

question 11

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 and related deferred acquisition costs.

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Definitions:

Social Information Processing Theory

A concept in interpersonal communication proposing that individuals adapt their communication strategies based on the social information they gather and process in any given context.

Work Environment

The setting, conditions, and culture that employees experience within their workplace, affecting their performance and well-being.

Compliance

The act of conforming to a request or command, often used in legal and regulatory contexts to denote adherence to rules or standards.

Internalization

The process of integrating beliefs, values, standards, or norms into one's own cognitive structure, often influencing behavior.