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Hi,
I have just seen an exam question from June 2011 (Grainger) that deals with impairment of financial instruments and the answer notes that :“The expected loss model is more subjective in nature compared to the incurred loss model, since it relies significantly on the cash flow estimates prepared by the reporting entity which are inherently subjective”
Do I need to know about both of these models?
ThanksHi,
No, the incurred loss model is the old standard. Remember the answers on the ACCA website do not get updated from when they were originally set, therefore any changes in the rules will not be accounted for. It is for that reason why it is useful to purchase an updated study text and revision kit.
Thanks
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