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Hi,
I have just done a question and to summarise :On 1 Jan xx , an entity loaned a charity $4m. The interest rate is 2% even though the market rate is 8%. The loan is repayable in 2 years time.
I am happy that the loan needs to be valued at the PV at inception at a discount factor of 8% – but then the answer goes on to measure it at the year end at amortise cost. Why is this? I don’t understand because its not an investment in shares or debt.
Thanks in advance
Discount to FV.
But the FV will not be what’s actually repaid.
So I would have to unwind the discount over the term to redemption – amortised cost – a bit like we do with the debt component of convertible loans.
Hello everyone, I have a question about Financial Instruments,
The company made three contracts with a bank and took three different types of loans : Eurobond, Unicredit and Just credit from Bank’s own money in USD for financing import contracts to have PPE.
Question:
1. Are the Loans for us Financial asset or Financil liability ?
2 . Our functional currency is UZS so at the end of the period we have FX gain and losses with the remaining amounts at the bank and what we will do with them?
3 . The prepayment that we have sent at the end of the period do we remeasure the money we prepaid?
4. The company took loans with X% interest will there be discounting of the loan or not?
Thank you in advance !
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