FINANCIAL ACCOUNTING THEORIES

1. What are the effects of direct and indirect origination costs to the carrying amount of a loan
receivable?

B. Added Subtracted

2. For a financial asset classified as “Stage 2” asset, the impairment loss is computed at

C. Either A or B, whichever is clearly more determinable.

3. A receivable is credit-impaired if

A. A loss event has occurred that is detrimental to the entity’s ability to collect the contractual cash
flows from the receivable.

4. The recoverable amount of a loan or note receivable that is credit-impaired but not purchased or
originated credit-

C. The present value of the estimated future cash flows to be received over the remaining life of the
receivable

5. Before impairment, the carrying amount of a credit-impaired loan or note receivable under “Stage 3”
of the general

B. Is equal to the unpaid principal plus any recorded accrued interest receivable.