Page 355 - FR Integrated Workbook 2018-19
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Answers




               Chapter 10







                   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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