Financial instruments
For the following question below, my answer if different from the answer key. I got $2000. But the answer key states that the answer is $1900.
Qn)The Rambo company purchases $20 000 of bonds. The asset has been designated as one at fair value through profit or loss. One year later, 10% of the bonds are sold for $4000. Total cumulative gains previously recognised in the Rambo's financial statements in respect of the asset are $1000.
In accordance with IFRS 9, what is the amount of the gain on disposal to be recognised in profit or loss ?
Ask the Tutor ACCA FR
Financial instruments
If 10% of the bonds are sold at a profit of $2,000, then 10% of the previous years' income has also to be recycled
In relation to that 10% sale, 10% of previous years' income has already been recognised so the $2,000 gain on sale is reduced by the $100 previously recognised
OK?
Yes. Thank you.
You're welcome
Sign in to reply to this topic.