Under Ind AS 109, a debt instrument can be measured at Amortized Cost only if it passes which two tests?
A. Cash Flow Test and Impairment Test
B. Liquidity Test and Solvency Test
C. Business Model Test and Fair Value Test
D. SPPI Test (Solely Payments of Principal and Interest) and Business Model Test
Answer: Option D
Solution (By JKSSB Mock Tests)
For a financial asset to be measured at Amortized Cost under Ind AS 109, it must pass the Business Model test (held to collect contractual cash flows) and the SPPI test (cash flows are solely payments of principal and interest).
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