Which of the Following Is True About Accounting for a Troubled

question 105

Multiple Choice

Which of the following is true about accounting for a troubled debt restructuring?

• A) If a receivable becomes impaired, it is remeasured at the discounted present value of the cash flows that were originally expected to be collected, but at a revised discount rate.
• B) Receivables are not remeasured; instead, fair values are obtained from reliable factors.
• C) If a receivable is continued, but with modified terms, a loss is typically recorded.
• D) Receivables are never settled outright at the time of a restructuring.

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