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For the above financial assets in debt, i have the following questions:
1. Do we amortise the asset during the year and then revalue it at year end and recognise any gains or losses in PL or OCI as appropriate OR we compare the initial carrying amount with year end fair value and recognise the gain or loss in PL or OCI as appropriate?
2. Do we continue to calculate the interest income on the initial carrying amount or on the new carrying amount (the year end fair value)?
3. do we follow the same treatment for financial liabilities through PL or OCI?Thank you.
Hi,
Even if it is a debt financial asset then we will record any interest income in the usual fashion and then revalue to fair value at the end of the year. The interest income will then continue in the following period based on the amount recorded within the accounts.
The same is true of financial liabilities.
Thanks
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