Regarding accounting for troubled debt, the three statements that are not true are the following... Group of answer choices The settlement of troubled debt results in an economic loss to the debtor because the creditor accepts more than the book value of the debt to settle the debt Because IFRS uses the present value approach to determine the magnitude of the settlement for troubled debt, the magnitude of the new book value of the restructured debt will be lower and the gain recognition will be larger under IFRS. The treatment for troubled debt is the same under both U.S. GAAP and IFRS. U.S. GAAP uses a “10 percent rule” to determine whether a gain is recognized by the debtor in a troubled debt situation.
Regarding accounting for troubled debt, the three statements that are not true are the following... Group of answer choices The settlement of troubled debt results in an economic loss to the debtor because the creditor accepts more than the book value of the debt to settle the debt Because IFRS uses the present value approach to determine the magnitude of the settlement for troubled debt, the magnitude of the new book value of the restructured debt will be lower and the gain recognition will be larger under IFRS. The treatment for troubled debt is the same under both U.S. GAAP and IFRS. U.S. GAAP uses a “10 percent rule” to determine whether a gain is recognized by the debtor in a troubled debt situation.
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 6TP: When a customer is delinquent on paying a notes receivable, your company has the option to continue...
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Regarding accounting for troubled debt, the three statements that are not true are the following...
Group of answer choices
The settlement of troubled debt results in an economic loss to the debtor because the creditor accepts more than the book value of the debt to settle the debt
Because IFRS uses the present value approach to determine the magnitude of the settlement for troubled debt, the magnitude of the new book value of the restructured debt will be lower and the gain recognition will be larger under IFRS.
The treatment for troubled debt is the same under both U.S. GAAP and IFRS.
U.S. GAAP uses a “10 percent rule” to determine whether a gain is recognized by the debtor in a troubled debt situation.
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