Question

6.
An entity has entered into a factoring arrangement with the bank and accordingly sold all its
debtors without recourse arrangement. However, as per the bank policy the company has
guaranteed a bad debt loss of 2%. Historically, the entity has had only 1% bad debt. What
will be the treatment of it under Ind AS 109?
(a) The debtors can be derecognised fully.
(b) The debtors cannot be derecognised.
(c) The debtors can be derecognised for 98% value.
(d) The debtors cannot be derecognised to the extent of continuing involvement only.​

Answer 1

Answer:

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