It Was Argued That the Old Version of AASB 1023

question 7

Multiple Choice

It was argued that the old version of AASB 1023 would inappropriately increase the volatility in earnings through:

• A) Its requirement to recognise short-term changes in the net market value of investments in the income statement regardless of whether or not management intends to hold the investments long term.
• B) The failure to net reinsurance reimbursements from claims so that a higher level of claims is reflected in the income statement despite the fact that management has mitigated against this.
• C) The failure to recognise the value of intangible assets such as client lists that contribute to a steady flow of income for an insurer.
• D) The failure to net reinsurance reimbursements from claims so that a higher level of claims is reflected in the income statement despite the fact that management has mitigated against this and the failure to recognise the value of intangible assets such as client lists that contribute to a steady flow of income for an insurer.
• E) None of the given answers.

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Definitions:

Retroactive Interference

A phenomenon where new information interferes with the recall of previously learned information.

Material Interference

The phenomenon where the learning or memory capability for one material is adversely affected by the presence of other material.

Long-term Memory

A type of memory responsible for the storage of information over an extended period, ranging from a few days to decades, and involves the capacity to retain and recall facts, experiences, and skills.

Reconstructive Memory

A theory suggesting that memory is not a straightforward retrieval of facts but rather a complex and constructive process, often influenced by personal experiences and beliefs.