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Hi Mike,
Im on to ch18 of your notes…its a lot more tricking not having your great lectures…but Ill manage since i have you great notes!!! 😉
One confusion though (so far) If I didnt missunderstand.
On the first page of ch18 its says that transaction costs ARE included and not expensed when an investment is classed as FVTPL but I looked at a you tube video of an explanation of FVTPL and they explain that if classed as FVTPL then the transaction costs are expensed. It that correct? Is it a missprint on the notes or am I really confused???
One more thing, is the alternative = amortised cost in sofp?…is that right? Meaning all chnages in valuation are taken to a revaluation account in reserves on sofp and the transaction costs are included in the sofp figure? im not sure if I understand this 100%).
Once again Mike thanks for your precious time and wisdom!!!From two different sources on the Internet, I quote:
“All financial instruments are measured initially at fair value; directly attributable transaction costs are added to or deducted from the carrying value of those financial instruments not subsequently measured at fair value through profit or loss”
“In the case of a financial asset not through profit or loss, it is initially measured at fair value plus transaction costs”
I shall be looking at the notes again in the “close season” so thanks for pointing out this apparent mistake
Here’s another quote from the Internet:
“Financial liabilities classified as FVTPL are initially measured at fair value and any transaction costs involved are written off to P or L”
Does that help?
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