In came across this question in one of the mocks:
In 2015, a company undertook the following two transactions:
1. Borrowed money from an insurance company and pledged some of its production facilities as collateral for the loan.
2. Entered into an agreement with a local construction company to build a new research facility at a fixed price. Construction is to begin by 1 January 2016 and be completed by 31 December 2018.
With respect to required disclosures in the company’s financial statements, which of the following is most accurate? If the company reports under: C) US GAAP, neither transaction must be disclosed. **correct answer**
Is this really correct? If a company under U.S GAAP takes out a loan and pledges collateral for it, it doesn’t need to disclose the loan nor the pledged collateral?