Where the change in the carrying amount of a liability is due to the impacts of using present values,the change shall be recognised as a(n):
A) gain on sale of liability.
B) revaluation reserve adjustment.
C) adjustment to opening retained earnings.
D) borrowing cost.

Question

Quizplus · Accepted Answer

When the change in the carrying amount of a liability is due to the impacts of using present values, it is recognized as a borrowing cost. This is because the adjustment reflects the cost of borrowing over time, taking into account the time value of money.

Where the Change in the Carrying Amount of a Liability