Under accounting standard NZ IAS 39, the statement in relation to changes in accounting for bad and doubtful debts that is true is:
A) The name of bad and doubtful debts expense may be changed to 'impairment loss' on debtors.
B) An impairment test will be applied so that debtors will not be carried in the balance sheet at more than is expected to be recovered.
C) The name of the contra asset account 'allowance for doubtful debts' may be changed to 'allowance for impairment loss'.
D) All of the statements are true.

Question

Quizplus · Accepted Answer

All three statements are true. Under NZ IAS 39, the term bad and doubtful debts expense may be changed to 'impairment loss' on debtors. An impairment test must be applied to debtors, ensuring that they are not carried on the balance sheet at more than the expected recoverable amount. The contra asset account 'allowance for doubtful debts' may also be renamed as 'allowance for impairment loss'.

Under Accounting Standard NZ IAS 39, the Statement in Relation