Under the CECL Approach Used in U

question 127

True/False

Under the CECL approach used in U.S. GAAP, impairments are only recognized for losses that occur more than a year in the future when a receivable has deteriorated in credit quality.

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time due to use and wear and tear.

Accounting Principles

Rules and conventions that guide the accounting practices and financial reporting of businesses.

Group Method

A depreciation technique that treats a collection of assets as a single entity for depreciation purposes, often used for assets that are similar in nature and have approximately the same useful lives.

Record Keeping

The systematic process of organizing and maintaining documents, records, and information to ensure accuracy, accessibility, and compliance.