The Salamander Company Has Evaluated Its Receivables, and Has Identified

question 76

Multiple Choice

The Salamander Company has evaluated its receivables, and has identified the following possible impairments:

• Note #1 has recently deteriorated in credit quality. For Note #1, Salamander
estimates the present value of credit losses occurring in the next twelve months
is $50,000, and the present value of credit losses occurring after twelve months
is $20,000.
• Note #2 has not deteriorated in credit quality. For Note #2, Salamander estimates
the present value of credit losses occurring in the next twelve months is $5,000,
and the present value of credit losses occurring after twelve months is $10,000.
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If Salamander is reporting under IFRS and therefore uses the ECL model, it would recognize an impairment loss of:

• A) $50,000.
• B) $55,000.
• C) $75,000.
• D) $85,000.

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Definitions:

Conditioned Stimulus

A formerly neutral signal that, after consistent association with an unconditioned stimulus, triggers a learned response.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without prior conditioning.

Conditioned Response

An automatic response established by training to an ordinarily neutral stimulus after association with an unconditioned stimulus.

Unconditioned Response

A natural, automatic reaction to a stimulus that occurs without the need for learning or conditioning.