Which statement is correct about the derecognition of an obligation before maturity?
A)There will be a gain on retirement.
B)There will be a loss on retirement.
C)There will be no gain or loss on retirement.
D)There could be either a gain or loss on retirement.

Question

Quizplus · Accepted Answer

The derecognition of an obligation before maturity could result in either a gain or loss depending on the difference between the carrying amount of the obligation and the amount paid to retire it. If the amount paid to retire the obligation is less than the carrying amount, there will be a gain. If the amount paid is greater than the carrying amount, there will be a loss. If the amount paid to retire the obligation is equal to the carrying amount, there will be no gain or loss.

Which Statement Is Correct About the Derecognition of an Obligation