Statement I: If, at the reporting date, the credit risk of a receivable has not increased significantly since initial recognition, interest revenue is calculated based on the amortized cost of the financial asset. Statement II: 12-month expected credit losses is determined for financial asset which credit risk has not increased significantly since initial recognition Statement III: Lifetime expected credit losses is the weighted average of credit losses with the respective risks of a default occurring as the weights. a. All statements are correct b. 2 out of 3 statements are incorrect c. 1 out of 3 statements are incorrect d. All statements are incorrect
Statement I: If, at the reporting date, the credit risk of a receivable has not increased significantly since initial recognition, interest revenue is calculated based on the amortized cost of the financial asset. Statement II: 12-month expected credit losses is determined for financial asset which credit risk has not increased significantly since initial recognition Statement III: Lifetime expected credit losses is the weighted average of credit losses with the respective risks of a default occurring as the weights. a. All statements are correct b. 2 out of 3 statements are incorrect c. 1 out of 3 statements are incorrect d. All statements are incorrect
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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17. Statement I: If, at the reporting date, the credit risk of a receivable has not increased significantly since initial recognition, interest revenue is calculated based on the amortized cost of the financial asset.
Statement II: 12-month expected credit losses is determined for financial asset which credit risk has not increased significantly since initial recognition
Statement III: Lifetime expected credit losses is the weighted average of credit losses with the respective risks of a default occurring as the weights.
a. All statements are correct
b. 2 out of 3 statements are incorrect
c. 1 out of 3 statements are incorrect
d. All statements are incorrect
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