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can i please know why there is a double entry of
Dr.RE 3.99
Cr. Financial Asset 3.99there has to be only a correcting entry of 1.23 because they have recognised at 48.5 but rather it has to be 47.27.
so why is that adjustment?
Hi,
it is correcting the initial measurement error. They recorded the financial asset at $50m when it should have been at $46.01m.
Have:
Dr FA 50
Cr Bank 50Should have:
Dr FA 46.01
Dr P/L 3.99
Cr BankIf you wish to make it easier for me to answer your questions then I’d suggest that you let me specifically know where in the question we’re meant to be looking, It helps immeasurably.
Thanks
thanks for replying…. 🙂
can i know what is the difference between the PV of the financial asset and the cash received?
is it the unwound part,that which would be unwinding at each year end??
Correct. The difference between the two is taken through profit or loss and then it is unwound as part of the discount using the effective rate.
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