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What does the Conceptual Framework state about derecognition? A. For an asset, derecognition normally occurs when...

What does the Conceptual Framework state about derecognition?

A. For an asset, derecognition normally occurs when the entity loses control of all or part of the recognized asset

B. For a liability, derecognition normally occurs when the entity no longer has a present obligation for all or part of the recognized liability

C. Derecognition is the removal of all or part of a recognized asset or liability from an entity's   statement of financial position

D. All of the above

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Answer #1

Derecognition is the removal of previously recognised financial asset or a financial liability from an entity's financial statements (Balance sheet). Generally an asset is derecognized when an entity's contractual rights over the cash flow of the asset have expired or the asset is transferred to any third party. Both the risk and rewards will be transferred to that party. Similarly for liabilities, liabilities will be derecognized when an entity doesn't have any financial present obligation over the entire or part of the recognised liability.

Answer is D) all of the above

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