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Chapter 3

3.2 Initial recognition of financial liabilities

Per IAS 39 Financial instruments: Recognition and measurement,
financial liabilities are initially recorded at FAIR VALUE LESS
transaction costs.

N.B. If FVPL, transaction costs are taken to P/L as an expense.

Par value of liability x
Less
discount (x)
––––
Cash received x
––––
Less
Transaction costs (x)

–––– Dr Cash
Amount initially
recorded x Cr Financial Liability
––––

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