Question
Prior to the audit of the financial statements, the members of the executive board of directors met to discuss the matter. There are several proposals
Prior to the audit of the financial statements, the members of the executive board of directors met to discuss the matter. There are several proposals that have been put forward to reduce the effect of such impairment loss on earnings per share as follows:
1. Increase the depreciation threshold for recognizable financial assets from 70% to 90%. These policy changes will be notified in the notes to the financial statements.
2. Recognize all impairment losses in other comprehensive income and open them in profit or loss distributable to shareholders.
3. Disregards an impairment loss and justifies in the notes to the accounts that the impairment loss of a financial asset is unrealized and temporary in nature.
Discuss the recognition of impairment losses on financial assets based on MFRS 9 Financial Assets and whether the recommendations of the above executive board members are contrary to those standards.
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