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sir when we are issuing a financial liability any fall in the market value of equity is met by a credit in SPL, when using FVPL method for debt valuation. now my doubt is why are crediting it to SPL?
for 2 reasons am against it:
-its unrealised
-What have to do with the MV of our debt? Coupons will still be payable the final redemption value is still the same. We have absolute nothing to do with the bonds FV unless they are callable bonds.No one ever claimed that the P&L is about realised profits!
You can only use FVPL in very restricted circumstances to correct accounting mismatch – if loan used to finance investment properties.
So if IP goes down and loan goes down gain and loss matched in P&L
Stay away from unnecessary jargon – callable bonds – not SBR
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