How should the cost of issuing debt (that is subsequently shown at amortized cost)in an acquisition be recognized initially?
A)Amortized over the term of the debt.
B)Deducted from shareholders' equity.
C)Deducted from the value of the debt.
D)Expensed.

Question

Quizplus · Accepted Answer

The cost of issuing debt that is subsequently shown at amortized cost in an acquisition should initially be deducted from the value of the debt. This approach aligns with the accounting treatment under International Financial Reporting Standards (IFRS) and generally accepted accounting principles (GAAP), where such costs are considered as an adjustment to the carrying amount of the debt and are amortized over the term of the debt through the effective interest method.

How Should the Cost of Issuing Debt (That Is Subsequently