Which of the following is correct about financial instruments?
A)Accounting for financial instruments has been consistent.
B)There is no economic substance to financial instruments.
C)They may be used in support of innovations designed to circumvent accounting standards.
D)All financial instruments are accounted for at fair value.

Question

Quizplus · Accepted Answer

Financial instruments can indeed be used in innovative ways, sometimes with the intention of circumventing accounting standards. This can involve structuring transactions in a manner that achieves certain financial reporting outcomes without necessarily reflecting the underlying economic reality.

Which of the Following Is Correct About Financial Instruments