Amortized Cost – NBC Institute

FR – May 2020 – L2 – Q2c – Bond Recognition under IFRS 9

Calculate the amount to be recognized in Asamankese Ltd’s financial statements for a bond purchased at a discount under IFRS 9.

Question

Asamankese Ltd (Asamankese) purchased a 6% GH¢50 million bond on 1 August 2018 at a 10% discount to par value. Expenses of purchase were GH¢500,000. The bond is due for redemption on 31 July 2028 at par. The effective annual interest rate to maturity is 7.3%. Asamankese intends to hold the bond until its maturity date.

Required:
In accordance with IFRS 9: Financial Instruments, how much should be recognized in Asamankese’s financial statements in respect of the above transaction for the year ended 31 July 2019 (to two decimal places)?

Answer

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Tags: Amortized Cost, Bonds, Effective Interest Rate, IFRS 9
Level: Level 2

Topic: Financial Reporting Standards and Their Applications
Series: MAY 2020

FR – May 2020 – L2 – Q2c – Bond Recognition under IFRS 9

Calculate the amount to be recognized in Asamankese Ltd’s financial statements for a bond purchased at a discount under IFRS 9.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Amortized Cost, Bonds, Effective Interest Rate, IFRS 9
Level: Level 2

Topic: Financial Reporting Standards and Their Applications
Series: MAY 2020

CR – Nov 2017 – L3 – Q2e – 17 Financial instruments: Recognition and measurement Corporate reporting

Advise on the accounting treatment for an investment bond not held to maturity under IFRS 9.

Question

DanKay Ltd bought a ten-year bond on 1 August 2016 at a cost of GH¢45 million. The bond carries an interest coupon of GH¢5 million paid annually in arrears, and its effective yield to maturity was 12% at the date of purchase. DanKay Ltd is holding the bond as a speculative investment, expecting its value to increase, and hopes to sell the bond at a profit in the short to medium term. On 31 July 2017, its reporting date, the fair value of the bond had declined to GH¢43 million. The interest payment was received as scheduled.

Required:
Advise DanKay Ltd on the treatment of the above in the financial statements for the year ended 31 July 2017 in accordance with IFRS 9: Financial Instruments.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Amortized Cost, Bond Valuation, Fair Value, Financial instruments, Investment
Level: Level 3

Topic: Financial instruments: Recognition and measurement Corporate reporting
Series: NOV 2017

FR – May 2020 – L2 – Q2c – Bond Recognition under IFRS 9

Calculate the amount to be recognized in Asamankese Ltd’s financial statements for a bond purchased at a discount under IFRS 9.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Amortized Cost, Bonds, Effective Interest Rate, IFRS 9
Level: Level 2

Topic: Financial Reporting Standards and Their Applications
Series: MAY 2020

FR – May 2020 – L2 – Q2c – Bond Recognition under IFRS 9

Calculate the amount to be recognized in Asamankese Ltd’s financial statements for a bond purchased at a discount under IFRS 9.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Amortized Cost, Bonds, Effective Interest Rate, IFRS 9
Level: Level 2

Topic: Financial Reporting Standards and Their Applications
Series: MAY 2020

CR – Nov 2017 – L3 – Q2e – 17 Financial instruments: Recognition and measurement Corporate reporting

Advise on the accounting treatment for an investment bond not held to maturity under IFRS 9.

Question

Required:
Advise DanKay Ltd on the treatment of the above in the financial statements for the year ended 31 July 2017 in accordance with IFRS 9: Financial Instruments.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Amortized Cost, Bond Valuation, Fair Value, Financial instruments, Investment
Level: Level 3

Topic: Financial instruments: Recognition and measurement Corporate reporting
Series: NOV 2017

Question Tag: Amortized Cost

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FR – May 2020 – L2 – Q2c – Bond Recognition under IFRS 9

Calculate the amount to be recognized in Asamankese Ltd’s financial statements for a bond purchased at a discount under IFRS 9.

FR – May 2020 – L2 – Q2c – Bond Recognition under IFRS 9

Calculate the amount to be recognized in Asamankese Ltd’s financial statements for a bond purchased at a discount under IFRS 9.

CR – Nov 2017 – L3 – Q2e – 17 Financial instruments: Recognition and measurement Corporate reporting

Advise on the accounting treatment for an investment bond not held to maturity under IFRS 9.

FR – May 2020 – L2 – Q2c – Bond Recognition under IFRS 9

Calculate the amount to be recognized in Asamankese Ltd’s financial statements for a bond purchased at a discount under IFRS 9.

FR – May 2020 – L2 – Q2c – Bond Recognition under IFRS 9

Calculate the amount to be recognized in Asamankese Ltd’s financial statements for a bond purchased at a discount under IFRS 9.

CR – Nov 2017 – L3 – Q2e – 17 Financial instruments: Recognition and measurement Corporate reporting

Advise on the accounting treatment for an investment bond not held to maturity under IFRS 9.

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FR – May 2020 – L2 – Q2c – Bond Recognition under IFRS 9

Calculate the amount to be recognized in Asamankese Ltd’s financial statements for a bond purchased at a discount under IFRS 9.

You're reporting an error for "FR – May 2020 – L2 – Q2c – Bond Recognition under IFRS 9"

FR – May 2020 – L2 – Q2c – Bond Recognition under IFRS 9

Calculate the amount to be recognized in Asamankese Ltd’s financial statements for a bond purchased at a discount under IFRS 9.

You're reporting an error for "FR – May 2020 – L2 – Q2c – Bond Recognition under IFRS 9"

CR – Nov 2017 – L3 – Q2e – 17 Financial instruments: Recognition and measurement Corporate reporting

Advise on the accounting treatment for an investment bond not held to maturity under IFRS 9.

You're reporting an error for "CR – Nov 2017 – L3 – Q2e – 17 Financial instruments: Recognition and measurement Corporate reporting"

FR – May 2020 – L2 – Q2c – Bond Recognition under IFRS 9

Calculate the amount to be recognized in Asamankese Ltd’s financial statements for a bond purchased at a discount under IFRS 9.

You're reporting an error for "FR – May 2020 – L2 – Q2c – Bond Recognition under IFRS 9"

FR – May 2020 – L2 – Q2c – Bond Recognition under IFRS 9

Calculate the amount to be recognized in Asamankese Ltd’s financial statements for a bond purchased at a discount under IFRS 9.

You're reporting an error for "FR – May 2020 – L2 – Q2c – Bond Recognition under IFRS 9"

CR – Nov 2017 – L3 – Q2e – 17 Financial instruments: Recognition and measurement Corporate reporting

Advise on the accounting treatment for an investment bond not held to maturity under IFRS 9.

You're reporting an error for "CR – Nov 2017 – L3 – Q2e – 17 Financial instruments: Recognition and measurement Corporate reporting"

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