Use the following information for the next three questlons:Entity A, a manufacturing entity, obtains insurance against product liability from Entity B, aninsurance company. Entity B then cedes the insurance contact with Entity C, another insurancecompany.1. How does Entity B account for the insurance contract with Entity A?General modelPremium Allocation ApproachCa or bd. Not accounted for under PFRS 17How does Entity C account for the insurande contract ceded by Entity B?General modelPremium Allocation Approacha or bd. Modification to general model för reinsurance contracts held3 How does Entity B account for the insurance contract ceded to Entity CGeneral modetPremium Allocation Approacha orModification to geheral model for reinsurance contracts held

PFRS 17 standard closely aligns with IFRS 17 which describes the insurance, reinsurance contracts in…

Use the following information for the next three questions: Entity A, a manufacturing entity, obtains insurance against product liability from Entity B, an insurance company. Entity B then cedes the insurance contact with Entity C, another insurance company. 1 How does Entity B account for the insurance contract with Entity A? a General model. "b. Premium Allocation Approach C. a or b d. Not accounted for under PFRS 17 2. How does Entity C'account for the insurance contract ceded by Entity B? General model b. Premium Allocation Approach C. a or b d. Modification to general model för reinsurance contracts held 3 How does Entity B account for the insurance contract ceded to Entity C? General model Premium Allocation Approach a or b Modification to general model for reinsurance contracts held

Use the following information for the next three questions: Entity A, a manufacturing entity, obtains insurance against product liability from Entity B, an insurance company. Entity B then cedes the insurance contact with Entity C, another insurance company. 1 How does Entity B account for the insurance contract with Entity A? a General model. "b. Premium Allocation Approach C. a or b d. Not accounted for under PFRS 17 2. How does Entity C'account for the insurance contract ceded by Entity B? General model b. Premium Allocation Approach C. a or b d. Modification to general model för reinsurance contracts held 3 How does Entity B account for the insurance contract ceded to Entity C? General model Premium Allocation Approach a or b Modification to general model for reinsurance contracts held

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 7GI: If a seller enters into more than one contract with a specific customer, when should the contracts...

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Use the following information for the next three questions: Entity A, a manufacturing entity, obtains insurance against product liability from Entity B, an insurance company. Entity B then cedes the insurance contact with Entity C, another insurance company. 1. How does Entity B account for the insurance contract with Entity A? a. General model b. Premium Allocation Approach a or b d. Not accounted for under PFRS 17 2. How does Entity C account for the insurance contract ceded by Entity B? General model b. Premium Allocation Approach c. a or b d. Modification to general model for reinsurance contracts held 3. How does Entity B account for the insurance contract ceded to Entity C? a. General model b. Premium Allocation Approach C a or b d. Modification to general model for reinsurance contracts held OAD O 3)
Entity A obtains life insurance for its key employee from Entity B (an insurance company). Entity B cedes the insurance contract with Entity A to Entity C, another insurance company. How should Entity B account for the insurance contract with Entity C?A. using the modified version of the general model applicable for onerous insurance contractsB. using the general modelC. using a modified version of (a) or (b) applicable to reinsurance contracts heldD. using the premium allocation approach
Step 1 of the "five-step model" states that certain conditions must be satisfied before an entity can account for a contract with a customer. Which of the following is not one of these conditions? Oa The entity and the customer have approved the contract and are committed to perform their contractual obligations. O b. The payment terms can be identified. O citis certain that the entity will collect the consideration to which it is entitled. Od. Each party's rights about the goods or services concerned can be identified.
Which of the following is not a condition in identifying the contract with the customer as per IFRS 15? The entity and the customer have approved the contract and are committed to perform their contractual obligations It is certain that the entity will collect the consideration to which it is entitled Each party's rights with regard to the goods or services concerned can be identified The payment terms can be identified EN 2时 6 l
_____ is a contract that involves compensation for specific potential future losses in exchange for periodic payments and that provides for the transfer of the risk of a loss, from one entity to another, in exchange for a premium. a.Spot contract b.Insurance c.Hedging d. Forward contract
The new standard, Revenue from Contracts with Customers, recognizes revenue based on a(n): Revenue-Expense Approach Asset-Liability Approach O Asset-Equity Approach O Liability-Equity Approach
1. Under PFRS 15, how shall revenue from contracts with customers such as revenue from initial franchise fee be recognized by the franchisor? a. Upon receipt of the initial franchise fee by the franchisor. b. Upon signing of the franchise agreement. c. When the franchisor satisfies the performance obligation under the franchise agreement. d. Applying the legality over the substance of the transaction. DED g 15
S1: In accordance with the accrual assumption, the full amount of the premium is recognized immediately as income when received; instead, the premium is normally regarded as being earned evenly over the period of the policy. S2: ABC a manufacturer of appliances, approved to insure a customer for any loss or damage that the customer may incur from the use of a purchased appliance which is covered under PFRS 17.53: Under insurance contract, the party that has a right to compensation if the insured event occurs is referred to as the insurer. O Only S3 is incorrect O Only S3 is correct All statements are incorrect Only S1 is incorrect Only S1 is correct Only S2 is incorrect O Only S2 is correct All statements are correct
S1: In accordance with the accrual assumption, the full amount of the premium is recognized immediately as income when received; instead, the premium is normally regarded as being earned evenly over the period of the policy. S2: ABC a manufacturer of appliances, approved to insure a customer for any loss or damage that the customer may incur from the use of a purchased appliance which is covered under PFRS 17. S3: Under insurance contract, the party that has a right to compensation if the insured event occurs is referred to as the insurer. All statements are incorrect Only S3 is correct Only S3 is incorrect Only S2 is incorrect Only S2 is correct All statements are correct Only S1 is incorrect Only S1 is correct
Which document typically triggers the process of recording a liability? a. purchase requisition b. purchase order c. receiving report d. supplier’s invoice
S1: In accordance with the accrual assumption, the full amount of the premium is recognized immediately as income when received; instead, the premium is normally regarded as being earned evenly over the period of the policy. S2: ABC a manufacturer of appliances, approved to insure a customer for any loss or damage that the customer may incur from the use of a purchased appliance which is covered under PFRS 17. S3: Under insurance contract, the party that has a right to compensation if the insured event occurs is referred to as the insurer. a. Only S3 is incorrectb. All statements are correctc. Only S2 is correctd. Only S3 is correcte. Only S1 is incorrectf. Only S2 is incorrectg. All statements are incorrect h. Only S1 is correct
Under PFRS 15, what is the measurement basis of revenue from contracts with customers? Select the correct letter: A. Revocable amount of the consideration received or receivable B. Book value of the consideration received or receivable C. Fair value of the consideration received or receivable D. Historical cost of the consideration received or receivable