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Actuarial method and effective rate of interest

This topic has 1 reply, 2 voices, and was last updated 15 years ago by MikeLittle.

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May 22, 2010 at 1:48 pm #44034
Anonymous
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both the methods are the same i mean the working? Also can the effective rate of interest be lower than the actual rate? When we calculate finance cost the figure at the end is it always accrued and that amount is supposed to be shown in the accrued interest in current liabilities in SFP?
May 24, 2010 at 3:12 pm #60804
MikeLittle
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Isn’t the figure “at the end” added to the liability and charged to income statement?
I think it is – it’s rolling up the obligation so that the final obligation at the end of the loan term is then equal to the amount payable to redeem the loan.
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