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Financial instruments
5.5 Accounting entries for loss allowance
If the financial asset is measured at amortised cost then the entry to increase an
allowance is:
Dr Profit or loss X
Cr Allowance (SFP) X
The allowance account reduces the net carrying amount of the financial asset.
If the financial asset is measured at FVOCI then the entry to record an increase in
the allowance is:
Dr Profit or loss X
Cr OCI X
Illustrations and further practice
Now try TYU question 12 from Chapter 11.
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