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ARS not indiv significnt should be collectively assessed andARS not considered impaired should be included with other AR with similar credit

True or False

User Lzh
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1 Answer

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Final answer:

It is true that accounts receivable not individually significant should be collectively assessed, and non-impaired accounts should be grouped based on similar credit risk for impairment evaluation, as per accounting standards.

Step-by-step explanation:

The statement suggests that accounts receivable (AR) not individually significant should be collectively assessed for impairment, and AR that is not considered impaired should be grouped with other accounts receivable with similar credit risk characteristics. This is generally true according to accounting principles. Companies often perform a collective assessment for a group of receivables when individual assessment is impractical. This approach helps in recognizing impairment losses on AR balances that may not be significant individually but could be significant in aggregate. Additionally, grouping AR with similar credit risk characteristics is a common practice for the purpose of impairment evaluation.

User Michalis
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