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Financial instruments
3.3 Subsequent treatment of financial liabilities
As per IAS 39 Financial instruments: Recognition and measurement, financial
liabilities are typically shown at amortised cost.
Amortised cost accounting
Opening Interest Repayment Closing
balance balance
(at effective IR %) (at coupon rate)
Year 1 X X (X) X
Year 2 X X (X) X
Dr Cash Dr Financial Liability
Cr Financial Liability Cr Cash
Dr P/L (finance cost) Amortised cost
Cr Financial Liability (SOFP)
Liabilities that are held for trading can be designated as FVPL
financial liabilities. See section 4.3 for a definition of FVPL.
Loss making derivatives (shown as financial liabilities) are also
FVPL.
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