Coatmin: Financial Guarantee — OpenTuition Forums

MMarina9y ago

Dear Tutor, I have a question regarding the accounting entries for the calling of the guarantee: DEBIT Financial liabilities $39.6m CREDIT Profit or loss $39.6m Why the entry is not for the amount $39.2, which would leave the amortisation of 0.4 also for the second year in the P/L? Thank you.

P2-D2Tutor9y ago#1

Hi, Where is the question? Thanks

MMarina9y ago#2

Dear Tutor, the question is from the BPP revision kit: Question No. 18 Coatmin. Thank you.

P2-D2Tutor9y ago#3

Hi, The journal is removing the $39.2 million that was recorded at the reporting date and also the amortisation of the fair value of the guarantee at $0.4 million. I wouldn't worry too much about this one though as it is a ridiculously hard question. Thanks

MMarina9y ago#4

Thank you.

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