Under IAS 34, Which of the Following Costs Is Not

question 6

Multiple Choice

Under IAS 34, which of the following costs is not viewed as a constructive obligation?

• A)Contingent lease payments in excess of a contractual base amount
• B)Year-end bonuses
• C)Quantity discounts or rebates
• D)Maintenance costs

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Definitions:

Contract Rate

This refers to the interest rate stated in a contract that determines the amount of interest owed on a loan or financial agreement.

Stated Rate

The interest rate expressed in the terms of a loan or investment agreement, not necessarily reflecting the actual yield.

Effective Rate

The effective rate is the actual interest rate on a loan or financial product, taking into account the compounding of interest, as opposed to the nominal rate.

Debenture Bond

A debenture bond is a type of unsecured loan that is backed only by the general creditworthiness and reputation of the issuer, not by any collateral.