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investment in debt : Transaction cost

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › investment in debt : Transaction cost

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  • May 26, 2019 at 12:54 pm #517410
    Avatarnikaido
    Member
    • Topics: 41
    • Replies: 89
    • ☆☆

    Hi Chris

    what happens to the transaction cost please under the investment in debt in all 3 cases

    1) Amortised

    2) FVTOCI

    3) Fair value for trading

    Additionally i am aware that credit losses are applicable on amortised cost debt and not fair value, because once we recognize the asset at its fair value , the credit impairment will make no sense

    but i keep on hearing it is applied on FVTOCI as well, how ? and wouldnt it be rendered meaningless as well

    Thanks

    May 28, 2019 at 3:06 pm #517677
    AvatarP2-D2
    Keymaster
    • Topics: 4
    • Replies: 7232
    • ☆☆☆☆☆

    Hi,

    If you are refering to the issue costs then for amortised cost and FVTOCI they will be included as part of the asset. For FVTPL they will be expensed.

    It will be applied to debt instruments held at FVTOCI.

    Thanks

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