Derecognition of a financial liability occurs when:
A) the contractual obligation has been settled due to the transfer of a cash consideration.
B) there is an extension to the terms of the contractual obligation.
C) the contractual rights to cash flows has expired.
D) the entity obtains control of the financial instrument.

Question

Quizplus · Accepted Answer

Derecognition of a financial liability occurs when the contractual obligation has been settled due to the transfer of a cash consideration. This means that the liability has been fully discharged and there is no longer any obligation to make payments.

Derecognition of a Financial Liability Occurs When