• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

New! BPP Books for ACCA September 2022 Exams are now available, get your discount code >>

Discounting down

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Discounting down

  • This topic has 5 replies, 2 voices, and was last updated 1 year ago by P2-D2.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • May 20, 2021 at 7:03 am #621162
    sartersanbor
    • Topics: 5
    • Replies: 5
    • ☆

    Hello,

    I am going through the Financial Instruments chapter and cannot understand why we discount down a covertible loan but we do not do this with the financial asset raising in the other entity. Can you please advise?

    Sara

    May 22, 2021 at 9:25 am #621407
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6115
    • ☆☆☆☆☆

    Hi,

    Although you are not going to see this in the exam, from the investing perspective it does not matter whether you have an investment in shares or an investment in debt as both will be shown as an asset investment.

    This is obviously different from what we see from the issuers perspective that we see in the exam where the redemption is party for cash (debt) and shares (equity).

    Thanks

    May 28, 2021 at 6:44 am #621968
    sartersanbor
    • Topics: 5
    • Replies: 5
    • ☆

    Thanks but I still do not understand why we only do discount down from the issuer´s side…Can you please explain further?

    May 29, 2021 at 7:56 am #622106
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6115
    • ☆☆☆☆☆

    Hi,

    We are discounting down from the issuers side as we are split accounting, treating part of the proceeds as debt and part as equity. The discounting is done to calculate the debt element.

    There might be some discounting on the acquisition side depending on the terms of the issue and if the instrument has been issued at a discount or with a premium on redemption but this is unlikely given the equity option.

    Thanks

    June 3, 2021 at 5:48 am #622864
    sartersanbor
    • Topics: 5
    • Replies: 5
    • ☆

    ok, many thanks for your reply

    June 3, 2021 at 9:48 pm #623010
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6115
    • ☆☆☆☆☆

    You’re welcome, glad you’ve understood it.

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate

If you have benefited from OpenTuition please donate.

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • Joanne94 on The Management Accountant’s Profit Statement – Marginal Costing – ACCA Management Accounting (MA)
  • John Moffat on The Management Accountant’s Profit Statement – Marginal Costing – ACCA Management Accounting (MA)
  • AbrahamChinYuan on UNCISG – ACCA LW Global
  • jingdong on Pensions (IAS 19) – Introduction – ACCA (SBR) lectures
  • jingdong on Pensions (IAS 19) – Example – ACCA (SBR) lectures

Copyright © 2022 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy