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A company borrowed $47 million on 1 December 20X4 when the market and effective
interest rate was 5%. On 30 November 20X5, the company borrowed an additional
$45 million when the current market and effective interest rate was 7.4%. Both financial
liabilities are repayable on 30 November 20X9 and are single payment notes, whereby
interest and capital are repaid on that date.
Required
Discuss the accounting for the above financial liabilities under IFRS 9 using amortised cost,
and additionally using fair value as at 30 November 20X5.In the answer they says that if the 2 loans were carried at fairvalue then both of them have same value
I didnot get it.Could you please explain the fairvalue part?This is a very old question from a previous syllabus – it may even be older than you are!. If you search you will find some discussion of it, but I certainly wouldn’t worry about the numbers. The numbers really belong in the AFM exam.
Search under ‘Complexity’
https://opentuition.com/topic/bpp-revision-guide-21-complexity/
PS Please could you make your thread title a bit more informative to assist students searching with the same question.
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