What risk that one party to a financial instrument will fail

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Reference no: EM132894150

Problem 1: The classification of a financial instrument on the Statement of Financial Position of an entity is governed by the principle of:

A. legal form;
B. net present value;
C. substance over form;
D. forfeiture.

Problem 2: The risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss is referred to as:

A. interest rate risk;
B. liquidity risk;
C. market risk;
D. credit risk.

Problem 3: A share -based payment transaction in which the entity acquires goods or services by incurring liabilities to the supplier for amounts that are based on the value of the entity?s shares or other equity instruments of the entity is classified in IFRS 2 Share-based Payment as

A. an equity-settled share-based payment transaction
B. a cash-settled share-based payment transaction
C. a liability-settled share-based payment transaction
D. an "other" share-based payment transaction

Reference no: EM132894150

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