Financial Instruments

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October 2, 2015 at 10:09 am #274672
yvonec
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On 1 January 2011 Swann issued 5% $30,000 loan notes at nominal value when the effective rate of interest is also 5% .The loan notes will be redeemed at par.The liability is classified at FVTPL.At the end of the first accounting period market interest rates have risen to 6%.
Required
calculate the fair value of the liability as at 31 Dec 2011?
October 2, 2015 at 8:44 pm #274736
MikeLittle
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So calculate the present value of the cash flows using such information as is available to you (ie use 6% in your calculations)
Then compare with the calculation from last year and any increase / decrease goes through statement of profit or loss
Can you do that?
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