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How to account for interest free loan issued to employes? Acccording to IFRS9 to recognize in OCI the contractual cashflow must comprise on principal and interest But as its the interest free loan so it doesnot fulfill the criteria . So should i account in Fair value through P/L?
I fail to see how we could recognise the repayment of a loan in Other Comprehensive Income – surely the double entry for repayment of a loan must be Debit Cash and Credit Loan Receivable ie it’s purely a Statement of Financial Position entry
The interest on a loan is, of course, another matter. Yes, show loan interest receivable from a loan to an employee as other comprehensive income but, if it’s an interest free loan, there’s surely no affect on the Statement of Income / Statement of Comprehensive Income
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