alleryStart learning →Receivables taken over are at fair value. Is an extra credit loss allowance booked on day one?
AYes, 12-month ECL
BYes, lifetime ECL
CNo separate allowance
DYes, a flat 5% cut
Answer & Solution
Correct answer: C. No separate allowance
Fair value already reflects uncertainty about collection, so a separate valuation or loss allowance would double count.
Keep practising Ind AS 103 Business Combinations
Browse all Ind AS 103 Business Combinations questions for CA Final, or explore more Financialreporting topics.
Related questions
Acquiree's suit: present obligation, Rs 12 lakh fair value, payment unlikely. Entry?Vested acquiree awards that the acquirer does not replace become part of what?Fair value is an exit price in an orderly deal between which parties?What does Ind AS 103 add that IFRS 3 lacks on group reorganisations?Goodwill in Ind AS 103 is an asset that represents what?Which item does Ind AS 103 leave out of its scope?In pooling, the transferor's retained earnings balance is handled how?Does a large minority shareholding in a group company change its common control status?