Question
Question 34 In a debt extinguishment in which the debt is continued with modified terms and the carrying value of the debt is more than
Question 34
In a debt extinguishment in which the debt is continued with modified terms and the carrying value of the debt is more than the fair value of the debt,
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a loss should be recognized by the debtor.
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a new effective-interest rate must be computed.
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no interest expense should be recognized in the future.
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a gain should be recognized by the debtor.
Question 35
Many companies believe that off-balance-sheet financing
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is attempting to conceal the debt from shareholders by having no
information about the debt included in the balance sheet.
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wishes to limit all information related to the debt to the income statement
and the statement of cash flows.
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is in violation of IFRS.
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can enhance the quality of its financial position and perhaps permit credit
to be obtained more readily and at less cost.
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