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Chapter 20

Example 3.3

Statement of profit or loss (P/L)

Year 1 2

$ $
Finance income 1,400 1,456

Statement of financial position (SFP)

Year 1 2

$ $

Non-current assets

Financial assets 10,400 10,856

(W1) Amortised cost table

Year Opening balance Effective Coupon Closing balance
($) interest received (SFP)
14% (P/L) 10% ($)

1 10,000 1,400 (1,000) 10,400
2 10,400 1,456 (1,000) 10,856

Note: Effective interest rate is multiplied by opening balance.

Note: Coupon rate is multiplied by par value of the investment.

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