View source for Decision Tree Example 3 Answer (CIA.IFRS17-LRC)

{| class='wikitable'
|-
|| '''Problem 3''': Given the following information about a group of contracts, asses whether the group is onerous and take appropriate action (if any)
:* company is growing by implementing aggressive underwriting and pricing
:* no unfavourable trends are projected
:* FCF = 100
:* LRC ex. LC = 110
:* LC = 0
|}

'''Answer''':

* Based on the decision tree, a qualitative assessment of facts & circumstances indicates that this group of contracts <u>may</u> be onerous.
* A quantitative assessment comparing FCF = 100 to LRC ex. LC = 110 indicates the groups <u>is not onerous</u> because FCF < LRC ex.LC.
* No further action required.