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Clarification required.

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Clarification required.

  • This topic has 1 reply, 2 voices, and was last updated 2 months ago by P2-D2.
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    Posts
  • June 5, 2022 at 7:47 pm #657473
    RitikC
    • Topics: 8
    • Replies: 5
    • ☆

    I need assistance in a problem related to amortised cost method:
    So, there are two methods I have came across to split current and non current liabilities

    B/f Effective Interest. (Interest Paid). C/f
    X. Y. Z. X+Y-Z
    Here Y is CL and c/f will be NCL

    But sometimes, we also use:
    B/f Effective Interest. (Interest Paid). C/f
    A B C. D(A+B-C)
    X Y Z H(X+Y-Z)

    Here, H-D is CL and H is NCL

    How to precisely know where to use which method please assist very confused

    June 7, 2022 at 8:52 pm #657774
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6165
    • ☆☆☆☆☆

    Hi,

    Sorry but I can’t follow the layout of your tables. The easiest way to look at it is to take the number immediately to the right of the final payment in the following year, and this is the NCL element.

    The difference between this figure and the total liability at the reporting date is the CL element.

    I’d try not to take any short-cuts or memorise another alternative method of splitting the liability.

    Thanks.

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