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.

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