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financial asset

This topic has 1 reply, 2 voices, and was last updated 2 months ago by Stephen Widberg.

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September 24, 2024 at 12:57 pm #711729
kennigara
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Hi Dear Tutor, when we buy financial asset such as a bond and if it is valued through OCI (not @ amortised cost), which interest goes to as other income to P/L , effective interest rate or coupon rate?
September 25, 2024 at 8:43 am #711745
Stephen Widberg
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Effective rate 🙂
The interest charge will be the same whether the bond is AC or FVOCI
(remember that effective rate is the IRR, which is calculated using the actual cash flows on the bond)
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