Question 14 Which statement is incorrect regarding contractual cash flows that are solely payments of principal and interest (SPPI)? Group of answer choices An entity shall assess whether contractual cash flows are SPPI on the principal amount outstanding for the currency in which the financial asset is denominated. Contractual cash flows that are SPPI on the principal amount outstanding are consistent with a basic lending arrangement. Principal is the fair value of the financial asset at initial recognition. An originated or a purchased financial asset can be a basic lending arrangement only if it is a loan in its legal form.
Question 14 Which statement is incorrect regarding contractual cash flows that are solely payments of principal and interest (SPPI)? Group of answer choices An entity shall assess whether contractual cash flows are SPPI on the principal amount outstanding for the currency in which the financial asset is denominated. Contractual cash flows that are SPPI on the principal amount outstanding are consistent with a basic lending arrangement. Principal is the fair value of the financial asset at initial recognition. An originated or a purchased financial asset can be a basic lending arrangement only if it is a loan in its legal form.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 14
Which statement is incorrect regarding contractual
Group of answer choices
An entity shall assess whether contractual cash flows are SPPI on the principal amount outstanding for the currency in which the financial asset is denominated.
Contractual cash flows that are SPPI on the principal amount outstanding are consistent with a basic lending arrangement.
Principal is the fair value of the financial asset at initial recognition.
An originated or a purchased financial asset can be a basic lending arrangement only if it is a loan in its legal form.
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