![]() ![]() These paragraphs have the following treatments for loans (or debt instruments): Paragraphs 11.14 to 11.32 deal with the subsequent measurement. Other financial assets or financial liabilities should initially be measured at the transaction price (including transaction costs). ![]() When such assets and liabilities are initially recognised, it is for the entity to decide whether or not to treat them as such designated items to be valued at fair value with changes in value going to profit or loss (paragraphs 11.27 to 11.32). Financial assets and liabilities that are measured at fair value through profit and loss.If the arrangement is a financing transaction, the entity shall measure the financial asset or financial liability at the present value of the future payments discounted at the market rate of interest for a similar debt instrument.This splits the treatment into the following three categories: Paragraph 11.13 deals with the initial measurement. Loans payable by the entity or receivable by the entity with a fixed interest rate or with no interest would normally be treated as basic financial instruments and come within section 11 of FRS 102.įRS 102 explains how these loans should be accounted for both in terms of the initial recognition and how they should be treated in subsequent reporting dates. An introduction to professional insightsįRS 102 deals with accounting for financial instruments in section 11 ‘basic financial instruments’ and section 12 ‘other financial instruments’.Virtual classroom support for learning partners.Becoming an ACCA Approved Learning Partner.Resources to help your organisation stay one step ahead.
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