Which of the following statements is not correct with respect to accounting for Guarantees?

Multiple Choice

• a). When one company guarantees the debt of another company, that contingency must be disclosed even if the contingency is only remotely possible.

• b). The Guarantee liability account represents deferred revenue associated with the stand-ready fee.

• c). Both the “stand ready obligation” and the contingent future obligation are recorded at fair value.

• d) The Guarantee liability account decreases over the life of the loan as revenue is earned.

Answer rating: 100% (QA)

Answer The option c is the incorrect answer ... View the full answer