The loss to be recognized by a creditor on an impaired loan is the difference between the investment in the loan and the expected undiscounted future cash flows from the loan.

Question

Quizplus · Accepted Answer

The loss recognized by a creditor on an impaired loan is the difference between the carrying amount of the loan and the present value of expected future cash flows discounted at the loan's original effective interest rate, not the undiscounted future cash flows.

The Loss to Be Recognized by a Creditor on an Impaired