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Financial instruments – introduction – ACCA Financial Reporting (FR)

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  4. good day sir,
    it was very helpful seeing this lecture but i have one question regarding IFRS 7 and IFRS 9
    so in case of impairment cost. let’s say the a bank agreed to reprofile one of the loans maintaining same pricing level, but extending the tenor and there’s a management fees to be paid on signing the agreement however the bank held it to the upcoming year.

    that case:
    there will be a n impairment cost of the management fees?
    second question can as per IFRS 7 i can disclose it in the notes to the financials since it will be paid in the upcoming year? or i am obligated to present it at my financials as IFRS 9 impairment Cost?

  9. Hi,
    I have a doubt. Part of the definition of financial assets states that:

    “It is a contractual right to exchange financial assets or liabilities with another entity under conditions that are potentially favourable’

    What does it mean to be favourable?

    Overall, your video was really helpful. Thank you!

    • Suppose u r on salary basis and u get salary on month end and now u dont have cash to buy shares of apple company
      Current price per share is 100.
      U have desire to buy but not enough money to buy shares.
      And u think this price of share will be 120 when u get the salary
      Therefore u think for each share u will have to pay 20 more at the end of month
      So u get into future contract now (at begning) by paying some small amount and in this future contract u promise to buy at 105 at end of month no matter whatever the price is.
      Now if at end of month price of each share is 120 so u will not have to pay 120 but only 105 as decided ( this is favourable situation)
      Now if market price at end of month is 90 then also u will have to buy at 105 ( this is unfavourable)

    • Don’t worry too much about this, as it isn’t seen in FR and is seen in SBR. It is essentially referring to forward contracts whereby if we are making a gain from entering into it then it is favourable and vice-versa.

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