The Statement in Relation to the Current Replacement Cost of Liabilities

question 29

Multiple Choice

The statement in relation to the current replacement cost of liabilities that is correct is:

• A) Current replacement cost for liabilities is the amount that could be borrowed now with a similar debt instrument against a promise to pay the interest and principal commitments of the existing liability
• B) The current replacement cost of a liability is difficult to measure
• C) If current replacement cost is the characteristic of assets that is measured, then, for consistency, liabilities should also be measured at current replacement cost
• D) All the statements are correct

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Definitions:

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