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Forums › ACCA Forums › ACCA FR Financial Reporting Forums › BORROWING COST
Apex received a $10 million 6% loan on 1 April 20X7. The loan will be redeemable at a premium which means the loan has an effective finance cost of 7.5% per annum. The loan was specifically issued to finance the building of a new store.
Construction of the store commenced on 1 May 20X7 and it was completed and ready for use on 28 February 20X8, but did not open for trading until 1 April 20X8
How should the loan be treated in the financial statements of Apex for the year ended
31 March 20X8?
A Present value
B Fair value through other comprehensive income
C Fair value through profit or loss
D Amortised cost.
the correct ans is D Could you please explain what is amortised cost?