Exam 6C Practice Question 11
Study guide: Exam 6C
A group of contracts measured under the general measurement approach is onerous at initial recognition: its fulfilment cash flows are a net outflow of 300. At the next reporting date, estimates of future cash flows relating to future service improve by 500. No other changes occur, and ignore any release of the loss component between the two dates.
What are the loss component and the CSM after the change?
- A) Loss component 300; CSM 0
- B) Loss component 0; CSM 200
- C) Loss component 0; CSM 500
- D) Loss component 300; CSM 500
- E) Loss component 0; CSM 0, with the full 500 recognized in profit or loss
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