Page 123 - FR Integrated Workbook 2018-19
P. 123
Financial assets and financial liabilities
Example 1
Amortised cost
The following table is useful for working out the carrying amount of a liability
that is measured at amortised cost:
Reporting period Opening Interest 2 Cash 3 Closing
amount amount
Year ended X 1 X (X) X
31 December 20X1
1 In the first year of the liability, the initial value will be its fair value less
transaction costs.
2 Interest is charged using the effective rate of interest.
3 Cash interest payments are normally based on the nominal (par) value of
the liability and the coupon rate of interest.
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