Solution-How much of the transferred receivables is

How much of the transferred receivables is derecognized

Reference no: EM132672827

ABC Co. transferred loans receivables with carrying amount of ?900,000 and fair value of ?1,000,000 to XYZ, Inc. for cash amounting to ?1,000,000.

Problem 1. If ABC Co. transfers substantially all the risks and rewards of ownership of the loans receivable, how much of the transferred receivables is derecognized?

Problem 2. If ABC Co. is obligated to repurchase the transferred loans at a future date for the fair market value of the instrument at repurchase date plus 10% interest, how much of the transferred receivables is derecognized?

Problem 3. If ABC Co. is obligated under the terms of the transfer to repurchase any individual loan but the aggregate amount of loans that could be repurchased could not exceed ?100,000, how much of the transferred receivables is retained in the books and not derecognized?

Problem 4. If ABC Co. retains only a right of first refusal to repurchase the transferred asset at fair value if XYZ, Inc. subsequently sells it, how much of the transferred receivables is derecognized?

Reference no: EM132672827

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How much of the transferred receivables is derecognized

Reference no: EM132672827

Reference no: EM132672827

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