Financial liabilities – ACCA SBR lectures
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I have question to issue costs of 100,000 in example 2
Are they included in the effective rate?
I expected that the issue costs would be recognised in losses in P&L or as a deferred cost and then recognised in P&L over loan term. Can you explain please?
The liability is recognised at lower level. The effective rate is consequently higher as a result of this lower recognition.
I was actually expecting that the initial recognition would follow a SOFP FV method and the subsequent years will follow the amortised cost format. Why did we start immediately with amortised cost, including in year 1?
4.56% is a better EIR.
So, why do they put a premium and who benefits from it? Is it the company that issues the debentures or the other party that buys them?
Is it just me, or do the videos seem to start again with no sound? Giving the videos extra-length?
What happened to 5% premium, please?
It was in the last 2140 figure.
2,000,000 x 1.05 = 2,100,000
+ 40,000 cash paid
= 2,140,000
See the answer booklet, i think that explains it better if this isnt enough.