Which of the Following Is Not True Regarding Accounting for Transfers

question 12

Multiple Choice

Which of the following is not true regarding accounting for transfers of receivables under IFRS?

• A) Transfers of receivables sometimes are treated as a sale of receivables.
• B) Transfers of receivables sometimes are treated as a secured borrowing.
• C) Transfers of receivables can be treated as a sale if the transferee is a QSPE.
• D) Transfer of substantially all the risk and rewards of ownership is an important consideration.

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Definitions:

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.

Real-options Analysis

A financial modeling technique for valuing flexibility and decision-making in investment under uncertainty.

Incremental Analysis

The examination of the additional costs and benefits of certain decisions, focusing on the changes that would occur from choosing one alternative over another.

Payback Method

A capital budgeting technique that calculates the time required to recoup the cost of an investment.