For a loan receivable, impairment loss is calculated as the difference between the investment in the loan and the expected future cash flows discounted at the loan's historical effective interest rate.

Question

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This statement is true. Impairment loss for a loan receivable is calculated using the expected future cash flows discounted at the loan's historical effective interest rate, which is then compared to the carrying amount (investment) of the loan. The difference between the two represents the impairment loss.

For a Loan Receivable, Impairment Loss Is Calculated as the Difference