Entity a Has Provided a Bank Guarantee to a Bank

question 30

Multiple Choice

Entity A has provided a bank guarantee to a bank in relation to a loan provided to entity B. Entity B is solvent and shows no signs of defaulting on the loan. The treatment of the bank guarantee in the records of entity A is to:

• A) recognise a liability
• B) recognise a provision
• C) recognise a contingent liability
• D) do nothing

---

Definitions:

Sustainability Metrics

Measures used to evaluate and report on the sustainability performance of an organization, assessing its impact on the environment, society, and economy.

Supply Chain

A network comprised of entities, individuals, processes, data, and assets that facilitates the transfer of goods or services from the provider to the end user.

Sustainability Focus

An approach centered on ecological and social responsibility in business practices to ensure long-term environmental health and viability.

Carbon Tax System

An environmental policy instrument that places a tax on carbon dioxide emissions, aiming to reduce the impact of climate change by encouraging reductions in greenhouse gas emissions.