IFRS 9 Flashcards
Initial recognition of financial liabilities?
FV through SPL - expense transaction costs
If there’s no fair value in financial liability?
Deduct carrying amount
Subsequent measurement of financial liability?
Amortised cost
Fair value through SPL
What is the amortised cost?
Finance cost using effective rate of interest
Increase carrying amonut of financial liability?
Debit: Finance cost
Credit: liability
Liability is reduced by cash payments made during the year?
Debit: liability
CreditL Cash
Cash payment of financial liability treatment?
Part of interest paid in SCF
What is done for finance cost?
Opening liability * effective %
Put in SPL
What is done with cash payments?
Nominal value * coupon %
Put in SCF
What is done with closing liability?
Put in SFP
Initial recognition of liability?
Nominal value - discount issued - issue costs
Financial liability FV?
Is done through profit or loss
When is a financial asset recognised?
When entity becomes party to contractual provisions of the instrument
Is financial asset initially recognised at fair value?
Yes
Amortised cost for financial asset? (business model)
Asset held within business model in order to collect contractual cash flows
Amortised cost for financial asset? (contractual)
Contractual terms of financial asset gives rise to cash flows that are solely payments of principal and interest on principal outstanding
Fair value OCI for financial asset (business model)
Asset held within business model in order to collect contractual cash flows and selling financial assets
Fair value OCI for financial asset (contractual)
Contractual terms of financial asset gives rise to cash flows that are solely payments of principal and interest on principal outstanding
How should losses in financial assets be recognised?
Losses recognised in OCI
How should interest income in financial assets be recognised?
Through SPL
What if asset does not contractual or business model requirements?
Recognise at FV at a profit or loss
FVOCI?
Collect cash flows and sell financial assets
FVTPL?
Financial assets that don’t meet criteria for amortised cost or FVOCI
What happens with equity component in convertible loan note?
Debit: Loan notes
Credit: Other components of equity
What happens with finance cost in convertible loan note?
Debit: Finance costs (interest - cash coupon)
Credit: loan notes
Issue costs in a loan?
Deduct from original value. Then put in an expense account
