Which of the Following Statements Is Incorrect? Under AASB 139

question 6

Multiple Choice

Which of the following statements is incorrect? Under AASB 139:

• A)debentures must initially be recorded at fair value
• B)transactions costs must never be incorporated into the carrying amount of debentures
• C)in the case of par issues the fair value is usually the same as the par amount
• D)premium or discount on issue should not be recognised as a revenue or expense in the period in which the debenture is issued

---

Definitions:

Interest Rate

The percentage charged on a loan or paid on an investment, representing the cost of borrowing or the income from lending.

Rate of Return

The gain or loss made on an investment over a specified period, expressed as a percentage of the investment's initial cost.

Stream of Benefits

A sequence of potential advantages or profits that may be gained from an investment over time.

Compounded Quarterly

An interest calculation method where the interest is added to the principal amount four times a year, leading to interest earned on previously earned interest.