The embedded derivative in a hybrid contract should be? a) Always separated b) Never separated c) Separated if meeting specific criteria d) Recorded at cost only
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- What are the examples of Derivative Instruments? Define each examples and differentiate its nature and usage.Which of the following should be avoided in a contract if cost certainty is important? Cost-of-living clauses Gainsharing clauses Profit sharing plans Piece-rate pay plansDescribe the difference between the forward price and the value of a forward contract?
- What Is Fixed-Price Contract with Redetermination?Onerous contractWhen allocating the transaction price to performance obligations when a stand-alone selling price is not readily observable, GAAP suggests all of the following approaches except the expected market margin approach. residual approach. expected cost plus a margin approach. adjusted market assessment approach.
- If a contract modification adds distinct goods or services and the contract price increases by an amount that reflects the stand-alone selling price of the added goods or services, then the contract modification should be accounted for By cumulative catch-up method. By prospective method. As a new separate contract. None of these choices.CFD is a derivative contract. Yes or NoIn order to create a separating equilibrium, low-risk drivers should be charged: Low deductible and high premiums High deductible and low premiums High premiums with no deductible