The Salamander Company Has Evaluated Its Receivables, and Has Identified

The Salamander Company has evaluated its receivables, and has identified the following possible impairments:

• Note #1 has recently deteriorated in credit quality. For Note #1, Salamander
estimates the present value of credit losses occurring in the next twelve months
is $50,000, and the present value of credit losses occurring after twelve months
is $20,000.
• Note #2 has not deteriorated in credit quality. For Note #2, Salamander estimates
the present value of credit losses occurring in the next twelve months is $5,000,
and the present value of credit losses occurring after twelve months is $10,000.
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If Salamander is reporting under IFRS and therefore uses the ECL model, it would recognize an impairment loss of:

A) $50,000.
B) $55,000.
C) $75,000.
D) $85,000.

Correct Answer:

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