Measurement of Long Term Receivable

DEBT INSTRUMENT
Measurement of Long Term Receivable
A.1 Interest Bearing - Realistic (nominal) interest

Comparable to the prevailing market rate of interest for notes with simil
Initial measurement: At fair value or face value
Subsequent measurement: At amortised cost/ face value
A.2 Interest Bearing - Unrealistic (nominal) interest

Discounted using the imputed interest rate that approximates the marke
the Face value is significant different from market value of the considera
Initial measurement:
a. One time collection of principal or term notes
PV of Principal (PV of 1 using effective rate * Principal)
PV of Interest payments (PV of ordinary annuity * Principal * Nomin
PV of the Notes XXX
b. Uniform collection of principal or serial notes

1st collection of Principal and interest * PV after 1 period
Nth collection of Principal and interest * PV after nth period
PV of the Notes XXX
Subsequent measurement: At amortised cost using the imputed interest rate that approximates the
B Non-interest Bearing/ Zero-rated Interest Bearing

Discounted using the prevailing market rate of interest for the similar no
Initial measurement:
a. Periodic payment (with available cash price). The PV of the note = Cash P
b. One-time collection of principal (No cash price). The PV of the note = Fac
c. Uniform collection of principal (No cash price). The PV of the note = Peri
Subsequent measurement: At amortised cost using the prevailing market rate of interest for similar
nterest for notes with similar terms (currency, term, type, other factos) and credit rating.
at approximates the market rate of interest for the same note, or

rket value of the consideration given up on exchange for the note.
ffective rate * Principal) Whereas:

annuity * Principal * Nominal Rate) If interest is other than annualy,
R/T = Annual rate/ Time
N*T = Number of payments * Time
fter 1 period
fter nth period
rate that approximates the market rate of interest for the same note
f interest for the similar note to arrive at the fair value.
The PV of the note = Cash Price.
e). The PV of the note = Face Value * PV of 1
). The PV of the note = Periodic Payment * PV of ordinary annuity of 1
rate of interest for similar notes.

10-7, 8, 9, 10, 11, 12
DEBT INSTRUMENT
INITIAL RECOGNITION AND SUBSEQUENT MEASUREMENT
On 1 January 2018, Ramon purchased P5M term bonds quoted at 105.

The bonds have the following terms:
6% interest annual
Principal is payable after 5 years
Ramon also incurred the following direct costs

Evaluation of the borrower's financial condition and t 100,000.00
Legal costs to negotiate the terms and prepare the 50,000.00
Subsequently, the bonds are quoted as follows

31-Dec-18 98
31-Dec-19 105
31-Dec-20 110
31-Dec-21 105
31-Dec-22 102
Prepare the entries from year 0 to year 5, assuming the debt security is accounted for as
Hold to collect till maturity

Hold to collect till maturity and sell
For short-term gains and losses
PP 5,000,000.00 1.05 5,250,000.00

Transaction costs 150,000.00
FAAC and FVOCI
Fair value changes - FVOCI, using 4.1932% EIR
Principal Interest Premium

Payment Collection Interest Income Amortization
1-Jan-18
31-Dec-18 300,000.00 226,433.76 73,566.24
31-Dec-19 300,000.00 223,348.97 76,651.03
31-Dec-20 300,000.00 220,134.82 79,865.18

31-Dec-21 300,000.00 216,785.90 83,214.10
31-Dec-22 300,000.00 213,296.55 86,703.45
1,500,000.00 1,100,000.00 400,000.00
Per Excel
Per Manual Comp
Rounding diff
Cumulative
PV FV Gain/(Loss) CY Gain/(Loss)
31-Dec-18 5,326,433.76 4,900,000.00 - 426,433.76 - 426,433.76
31-Dec-19 5,249,782.73 5,250,000.00 217.27 426,651.03
31-Dec-20 5,169,917.55 5,500,000.00 330,082.45 329,865.18
31-Dec-21 5,086,703.45 5,250,000.00 163,296.55 - 166,785.90
31-Dec-22 5,000,000.00 5,100,000.00 100,000.00 - 63,296.55
100,000.00
Fair value changes - FVPL
CY
PV FV Gain/(Loss)
31-Dec-18 5,250,000.00 4,900,000.00 - 350,000.00
31-Dec-19 4,900,000.00 5,250,000.00 350,000.00
31-Dec-20 5,250,000.00 5,500,000.00 250,000.00
31-Dec-21 5,500,000.00 5,250,000.00 - 250,000.00
31-Dec-22 5,250,000.00 5,100,000.00 - 150,000.00
FAAC
Initial recognition
Purchase price + Transaction costs
1-Jan-18 Investment in Debt Securities - FAAC 5,400,000.00

Cash 5,400,000.00
Subsequent measurement
At amortized cost
Amortisation of discount or premium is charged to interest income
Interest income is based on effective rate
31-Dec-18 Cash 300,000.00

Interest income 226,433.76
Investment in Debt Securities - FAAC 73,566.24
31-Dec-19 Cash 300,000.00

31-Dec-20 Cash 300,000.00

31-Dec-21 Cash 300,000.00

31-Dec-22 Cash 300,000.00

DERECOGNITION
Assume on the same problem:
The bonds were sold in 31 January 2019 at 105. Ramon costs to dispose amounting to P50,000.
Hold to collect till maturity

Hold to collect till maturity and sell
For short-term gains and losses
FAAC
Consideration received
Less: Interest income sold
Transaction cost
Net consideration
Less: Amortised Cost
Realised gain/loss - P/L
Consideration 5,000,000.00 5,250,000.00

5,000,000.00
0.06
1/12 - 25,000.00
Transaction cost - 50,000.00
5,175,000.00
Less: Carrying value 5,320,443.80

Realised loss - 145,443.80
Interest receivable 25,000.00

Interest Income 25,000.00

Amortisation value, 31 Dec 18 5,326,800.00

Premium Amortisation 76,274.40
From interest date to acquisitio 1/12 - 6,356.20
Amortisation value, 31 Jan 19 5,320,443.80
Cash 5,200,000.00
Loss on sale 145,443.80
Investment in Debt Securities - FAAC 5,320,443.80
Interest receivable (or interest income if not yet recorded) 25,000.00
In-between dates
On November 1, 2019 that Ramon bought 10% bonds with a face value of P5 Million. The bonds are da
The bonds were acquired to yield 12%. Interest is payable every December 31.
PV of Principal (PV of 1 using effective rate x Principal)

Add: PV of interest payments (PV of ordinary annuity x Principal x nominal rate)
PV - last interest date: XXX
Add: Discount/ (less) premium amortisation from last interest date up to date of acquisition
XXX
Add: Nominal Interest from last interest date up to date of acquisition
Total Purchase Price XXX
Investment in Debt Securities 4,749,224.91

Cash 5,165,891.57
Serial Bonds
On June 30, 2018 that Ramon bought 10% bonds with a face value of P5 Million.The bonds will mature
The bonds were acquired to yield 12%. Interest is payable semi-annually while the principal is payable
Years Principal Interest Total PVF

Collection Collection Collection
0 30-Jun-18 1.00000
1 12/31/2018 250,000.00 250,000.00 0.94340
2 6/30/2019 1,000,000.00 250,000.00 1,250,000.00 0.89000
3 12/31/2019 200,000.00 200,000.00 0.83962
4 6/30/2020 1,000,000.00 200,000.00 1,200,000.00 0.79209
5 12/31/2020 150,000.00 150,000.00 0.74726
6 6/30/2021 1,000,000.00 150,000.00 1,150,000.00 0.70496
7 12/31/2021 100,000.00 100,000.00 0.66506
8 6/30/2022 1,000,000.00 100,000.00 1,100,000.00 0.62741
9 12/31/2022 50,000.00 50,000.00 0.59190
10 6/30/2023 1,000,000.00 50,000.00 1,050,000.00 0.55839
5,000,000.00 1,500,000.00 6,500,000.00
Interest Discount Principal

Collection Interest Income Amortization Repayment
0 6/30/2018 0 -
1 12/31/2018 250,000.00 285,728.58 35,728.58 -
2 6/30/2019 250,000.00 287,872.29 37,872.29 1,000,000.00
3 12/31/2019 200,000.00 230,144.63 30,144.63 -
4 6/30/2020 200,000.00 231,953.31 31,953.31 1,000,000.00
5 12/31/2020 150,000.00 173,870.51 23,870.51 -
6 6/30/2021 150,000.00 175,302.74 25,302.74 1,000,000.00
7 12/31/2021 100,000.00 116,820.90 16,820.90 -
8 6/30/2022 100,000.00 117,830.16 17,830.16 1,000,000.00
9 12/31/2022 50,000.00 58,899.96 8,899.96 -
10 6/30/2023 50,000.00 59,433.96 9,433.96 1,000,000.00
Assume on the same problem:
Ramon has changed its business model management for its portfolio of financial assets on 31 Decembe
1 Hold to collect till maturity reclassed to a) HTM and sale or b) For short-term profit taking
2 Hold to collect till maturity and sell reclassed to a) HTC or b) For short-term profit taking
3 For short-term gains and losses reclassed to a) HTM or b) HTM and sell
FAAC
525.60
305.5
Reclassed to FVOCI
31-Dec-19 Debt securities at FVOCI 5,250,000.00

Reclassification loss - OCI 525.60
Debt securities at FAAC 5,250,525.60
31-Dec-20 Cash 300,000.00

Interest Income (using original EIR) 220,522.08
Debt securities at FVOCI 79,477.92
Fair value changes - using 4.2030% original EIR
6% 4.200%
Interest Premium
Collection Interest Income Amortization Present Value
1-Jan-18 5,400,000.00
31-Dec-18 300,000.00 226,800.00 73,200.00 5,326,800.00
31-Dec-19 300,000.00 223,725.60 76,274.40 5,250,525.60
31-Dec-20 300,000.00 220,522.08 79,477.92 5,171,047.68
31-Dec-21 300,000.00 217,184.00 82,816.00 5,088,231.68
31-Dec-22 300,000.00 211,768.32 88,231.68 5,000,000.00
1,500,000.00 1,100,000.00 400,000.00
Amortisation using revised EIR of 4.19170%
6% 4.19170%
Interest Premium
1-Jan-18
31-Dec-18
31-Dec-19 5,250,000.00
31-Dec-20 300,000.00 220,064.15 79,935.85 5,170,064.15
31-Dec-21 300,000.00 216,713.48 83,286.52 5,086,777.64
31-Dec-22 300,000.00 213,222.36 86,777.64 5,000,000.00
900,000.00 650,000.00 250,000.00
Difference between the revised and the old EIR

Revised Original Difference
31-Dec-20 79,935.85 79,477.92 457.92
31-Dec-21 83,286.52 82,816.00 470.52
31-Dec-22 86,777.64 88,231.68 - 1,454.04

Debt securities at FVOCI 457.92
Fair value changes - FVOCI
Cumulative
FV PV @ new EIR Gain/(Loss) CY Gain/(Loss)
31-Dec-20 5,500,000.00 5,170,064.15 329,935.85 329,935.85

31-Dec-21 5,250,000.00 5,086,777.64 163,222.36 - 166,713.48
31-Dec-22 5,100,000.00 5,000,000.00 100,000.00 - 63,222.36

Unrealised gain - OCI 329,935.85
31-Dec-21 Cash 300,000.00


Debt securities at FVOCI 470.52
31-Dec-22 Cash 300,000.00


Reclassification loss - OCI 1,454.04

Reclassed to FVPL
31-Dec-19 Debt securities at FVPL 5,250,000.00

Reclassification loss - P/L 525.60
31-Dec-20 Cash 300,000.00

FV Changes
FV CV CY Gain/(Loss)
31-Dec-20 5,500,000.00 5,250,000.00 250,000.00
31-Dec-21 5,250,000.00 5,500,000.00 - 250,000.00
31-Dec-22 5,100,000.00 5,250,000.00 - 150,000.00
Debt securities at FVPL 250,000.00

Unrealised gain - P/L 250,000.00
31-Dec-21 Cash 300,000.00

Unrealised loss - P/L 250,000.00

31-Dec-22 Cash 300,000.00
Unrealised loss - P/L 150,000.00

accounted for as
4.19% Interpolation formula
Present Value PP 5,400,000.00 PV of Principal

5,400,000.00 Interest 6% semi-annual PV of of interest
5,326,433.76 Face Value 5,000,000.00
5,249,782.73
5,169,917.55 Effective rate PV Gap Difference

5,086,703.45 4% $5,445,182.23
5,000,000.00 PP ? 5,400,000.00 45,182.23
Face Value 6% 5,000,000.00 400,000.00
445,182.23
LR = 4% + [(HR-LR) * (PV of LR - PV of X)]

PV of LR - PV of HR
4.20298%
4.1932%
4.2030%
-0.0098% imm
Interest Premium
Collection Interest Income Amortization
1-Jan-18
31-Dec-18 300,000.00 226,800.00 73,200.00
31-Dec-19 300,000.00 223,725.60 76,274.40
31-Dec-20 300,000.00 220,522.08 79,477.92
31-Dec-21 300,000.00 217,184.00 82,816.00
31-Dec-22 300,000.00 213,705.73 86,294.27
1,500,000.00 1,101,937.41 398,062.59
Rounding differe
FVOCI
Initial recognition
Purchase price + Transaction costs
Investment in Debt Securities - FVOCI 5,400,000.00

Cash
At fair value
Amortisation of discount or premium is charged to interest income
Unrealised gain or loss is taken in OCI
Interest income is based on effective rate
Cash 300,000.00
Interest income
Investment in Debt Securities - FVOCI
Unrealised loss - OCI 426,433.76

Cash 300,000.00
Interest income
Investment in Debt Securities - FVOCI 426,651.03

Unrealised loss - OCI
Unrealised gain - OCI
Cash 300,000.00
Interest income
Investment in Debt Securities - FVOCI 329,865.18

Cash 300,000.00
Interest income

Cash 300,000.00
Interest income

amounting to P50,000.
accounted for as
FVOCI
Transaction cost
Net consideration
Add: Unrealised gain - OCI
Less: Unrealised loss - OCI
Less: Amortised Cost
Consideration recei 5,000,000.00 5,250,000.00

5,000,000.00
0.06
1/12 - 25,000.00
5,175,000.00
Less: Unrealised Loss - 426,800.00
4,748,200.00
Less: Carrying amount 4,893,643.80

Interest Income

Amortisation value, 31 Dec 18 5,326,800.00

Premium Amortisation 76,274.40
From interest date to acquisition date1/12 - 6,356.20
Amortisation value, 31 Jan 19 5,320,443.80
Carrying amount, 31 Dec 18 4,900,000.00

Amortisation of premium - 6,356.20
Carrying amount, 31 Jan 19 4,893,643.80
Unrealised fair value change (loss)

31-Dec-18 - 426,800.00
OR
Consideration recei 5,000,000.00 5,250,000.00
5,000,000.00
0.06
1/12 - 25,000.00
5,175,000.00
Less: Amortised Cost 5,320,443.80
Cash 5,200,000.00
Interest receivable
f P5 Million. The bonds are dated January 1, 2018 and will mature on December 31, 2022.
$3,177,590.39
x nominal rate) $1,518,674.67
$4,696,265.07
te up to date of acquisition 52,959.84

$4,749,224.91 1-Jan-18
416,666.67 31-Dec-18
$5,165,891.57 31-Dec-19
31-Dec-20
31-Dec-21
31-Dec-22
Discount amortisation
Nominal Interest
Effective interest full year
Million.The bonds will mature on June 30, 2023.

while the principal is payable in equal payments over 5 years, starting at the first anniversary.
Total Principal
Present Value Outstanding
5,000,000.00
235,849.06 5,000,000.00 235,849.06 -
1,112,495.55 4,000,000.00 222,499.11 889,996.44
167,923.86 4,000,000.00 167,923.86 -
950,512.40 3,000,000.00 158,418.73 792,093.66
112,088.73 3,000,000.00 112,088.73 -
810,704.62 2,000,000.00 105,744.08 704,960.54
66,505.71 2,000,000.00 66,505.71 -
690,153.61 1,000,000.00 62,741.24 627,412.37
29,594.92 1,000,000.00 29,594.92 -
586,314.52 - 27,919.74 558,394.78
4,762,142.97 1,189,285.17 3,572,857.79
Principal
Present Value Outstanding

4,762,142.97 5,000,000.00
4,797,871.54 5,000,000.00
3,835,743.84 4,000,000.00
3,865,888.47 4,000,000.00
2,897,841.77 3,000,000.00
2,921,712.28 3,000,000.00
1,947,015.02 2,000,000.00
1,963,835.92 2,000,000.00
981,666.07 1,000,000.00
990,566.04 1,000,000.00
- -
nancial assets on 31 December 2019.
accounted for as
b) For short-term profit taking

) For short-term profit taking
TM and sell
FVOCI
Fair value changes - using 4.2030% original EIR

6% 0.00000%
Interest Premium
Collection Interest Income Amortization
1-Jan-18
31-Dec-18 300,000.00 226,800.00 73,200.00
31-Dec-19 300,000.00 223,725.60 76,274.40
31-Dec-20 300,000.00 220,522.08 79,477.92
31-Dec-21 300,000.00 217,184.00 82,816.00
31-Dec-22 300,000.00 211,768.32 88,231.68
1,500,000.00 1,100,000.00 400,000.00
Rounding differe
Reclassed to FAAC
Investment
balance
5,250,000.00 31-Dec-19 Debt securities at FAAC
Debt securities at FVOCI
31-Dec-20 Cash
Interest Income
- 79,477.92 Debt securities at FVOCI
31-Dec-21 Cash
Interest Income
31-Dec-22 Cash
Interest Income
Reclassed to FVPL
31-Dec-19 Debt securities at FVPL

Reclassification loss
31-Dec-20 Cash
Interest Income
FV Changes
FV CV CY Gain/(Loss)
31-Dec-20 5,500,000.00 5,250,000.00 250,000.00
31-Dec-21 5,250,000.00 5,500,000.00 - 250,000.00
31-Dec-22 5,100,000.00 5,250,000.00 - 150,000.00
Debt securities at FVPL

Unrealised gain - P/L
31-Dec-21 Cash
- 457.92 Interest Income
Unrealised loss - P/L

31-Dec-22 Cash
Interest Income
Unrealised loss - P/L

329,935.85
- 82,816.00
- 470.52
- 166,713.48
- 88,231.68
1,454.04
- 63,222.36
5,100,000.00
5,250,000.00
250,000.00
- 250,000.00
- 150,000.00
5,100,000.00
$4,109,635.53 0.8219271068 4,109,635.53
$1,335,546.70 4.451822331 1,335,546.70
$5,445,182.23 5,445,182.23 Principal
Interest
Gap %
0.0082976531
0.0740740741
HR = 6% - [(HR-LR) * (PV of X - PV of LR)]

PV of LR - PV of HR
4.20298%
Cumulative
Present Value FV Gain/(Loss) CY Gain/(Loss)
5,400,000 1-Jan-18
5,326,800 4,900,000.00 - 426,800.00 - 426,800.00 31-Dec-18
5,250,526 5,250,000.00 - 525.60 426,274.40 31-Dec-19
5,171,048 5,500,000.00 328,952.32 329,477.92 31-Dec-20
5,088,232 5,250,000.00 161,768.32 - 167,184.00 31-Dec-21
5,001,937 5,100,000.00 98,062.59 - 63,705.73 31-Dec-22
98,062.59
1937
0.41
FVPL
Unrealised Investment
gain/loss Initial recognition
Purchase price
5,400,000.00 Investment in Debt Securities - FV

5,400,000.00 Expense
Cash
At fair value
No amortisation of discount or pre
Unrealised gain or loss is taken in
Interest income is based on nomin
Cash
226,433.76 Interest income
73,566.24 - 73,566.24
- 426,433.76 Unrealised loss

426,433.76 - 426,433.76 Investment in Debt Securities - FV
Cash
76,651.03 - 76,651.03
426,651.03 Investment in Debt Securities - FV

426,433.76 426,433.76 Unrealised gain
217.27 217.27
Cash
79,865.18 - 79,865.18
329,865.18 Investment in Debt Securities - FV

329,865.18 329,865.18 Unrealised gain
Cash
83,214.10 - 83,214.10
Unrealised loss
- 166,785.90
Cash
86,703.45 - 86,703.45
- 63,296.55 Unrealised loss

100,000.00 5,100,000.00
FVPL
Less:
Net consideration
Less: Carrying value (FV)
Consideration rec
Less:
426,800.00
Less: Carrying value

Realised gain
Interest receivable
25,000.00 Interest Income
6,356.20
Cash
Investment in Debt Securities - FV
426,800.00 Interest receivable (or interest inc
25,000.00 Gain on sale
4,893,643.80
2,837,134.28
1,802,388.10
Discounted at 4,639,522.38
0.12
Interest Discount
4,639,522.38
500,000.00 556,742.69 56,742.69 4,696,265.07
500,000.00 563,551.81 63,551.81 4,759,816.87
500,000.00 571,178.02 71,178.02 4,830,994.90
500,000.00 579,719.39 79,719.39 4,910,714.29
500,000.00 589,285.71 89,285.71 5,000,000.00
unt amortisation 52,959.84
nal Interest 416,666.67
tive interest full year 563,551.81

FVPL
Cumulative
Present Value FV Gain/(Loss) CY Gain/(Loss)
5,400,000.00
5,326,800.00 4,900,000.00 - 426,800.00 - 426,800.00
5,250,525.60 5,250,000.00 - 525.60 426,274.40
5,171,047.68 5,500,000.00 328,952.32 329,477.92
5,088,231.68 5,250,000.00 161,768.32 - 167,184.00
5,000,000.00 5,100,000.00 100,000.00 - 61,768.32
100,000.00
-
-
Reclassed to FAAC
Investment
balance
5,250,525.60 5,250,525.60 31-Dec-19
525.60
5,250,000.00
300,000.00
220,522.08
79,477.92 - 79,477.92 Amortisation using revised EIR of
300,000.00
217,184.00 1-Jan-18
82,816.00 - 82,816.00 31-Dec-18
31-Dec-19
300,000.00 31-Dec-20
211,768.32 31-Dec-21
88,231.68 - 88,231.68 31-Dec-22
5,000,000.00
31-Dec-20
5,250,000.00
5,250,000.00
525.60 31-Dec-21
525.60
300,000.00 31-Dec-22
300,000.00
250,000.00
250,000.00 Reclassed to FVOCI
300,000.00 31-Dec-19
300,000.00
250,000.00
250,000.00
300,000.00
300,000.00 1-Jan-18
31-Dec-18
150,000.00 31-Dec-19
150,000.00 31-Dec-20
31-Dec-21
31-Dec-22
Fair value changes - FVOCI
31-Dec-20
31-Dec-21
31-Dec-22
31-Dec-20
31-Dec-21
31-Dec-22
FV Proceeds EIR
6% 5% 4%
5,000,000.00 5,400,000.00 3,917,630.83 4,109,635.53
300,000.00 1,298,843.00 1,335,546.70
$5,400,000.00 $5,216,474 5,445,182.23

X - LR
HR - LR
X - 4%
5% - 4%
-$45,182
-$228,708
4% 0.197553886
4.1976%
4.1932%
0.0043%
Premium
Interest Collection Interest Income Amortization Present Value
$5,400,000.00
300,000.00 226,670.40 73,329.60 5,326,670.40
300,000.00 223,592.32 76,407.68 5,250,262.72
300,000.00 220,385.03 79,614.97 5,170,647.74
300,000.00 217,043.11 82,956.89 5,087,690.85
300,000.00 213,560.91 86,439.09 5,001,251.77
1,500,000.00 1,101,251.77 398,748.23
recognition
ment in Debt Securities - FVPL 5,250,000.00

150,000.00
5,400,000.00
quent measurement
ortisation of discount or premium

lised gain or loss is taken in P/L
st income is based on nominal rate
300,000.00
300,000.00
350,000.00
ment in Debt Securities - FVPL 350,000.00
300,000.00
300,000.00

350,000.00
300,000.00
300,000.00

250,000.00
300,000.00
300,000.00
250,000.00
300,000.00
300,000.00
150,000.00
ment in Debt Securities - FVOCI 150,000.00
deration received
Interest income sold
Transaction cost
nsideration
Carrying value (FV)
ed gain/loss - P/L
5,000,000.00 5,250,000.00
Interest income sold
5,000,000.00
0.06
1/12 - 25,000.00
5,175,000.00
Carrying value 4,900,000.00

275,000.00
st receivable 25,000.00
25,000.00
5,200,000.00
ment in Debt Securities - FVOCI 4,900,000.00
st receivable (or interest income if not yet recorded) 25,000.00
275,000.00
sed to FAAC

Debt securities at FVPL 5,250,000.00
tisation using revised EIR of 4.19170%
6% 4.19170%
Premium
5,250,000.00
300,000.00 220,064.15 79,935.85 5,170,064.15
300,000.00 216,713.48 83,286.52 5,086,777.64
300,000.00 213,222.36 86,777.64 5,000,000.00
900,000.00 650,000.00 250,000.00
Cash 300,000.00
Cash 300,000.00
Cash 300,000.00
sed to FVOCI
Debt securities at FVOCI 5,250,000.00

Debt securities at FVPL 5,250,000.00
6% 4.19170%
Premium
5,250,000.00
300,000.00 220,064.15 79,935.85 5,170,064.15
300,000.00 216,713.48 83,286.52 5,086,777.64
300,000.00 213,222.36 86,777.64 5,000,000.00
900,000.00 650,000.00 250,000.00
alue changes - FVOCI
Cumulative Gain/
FV PV @ new EIR (Loss) CY Gain/(Loss)
5,500,000.00 5,170,064.15 329,935.85 329,935.85

5,250,000.00 5,086,777.64 163,222.36 - 166,713.48
5,100,000.00 5,000,000.00 100,000.00 - 63,222.36
Cash 300,000.00

Cash 300,000.00

Cash 300,000.00

Unrealised Investment
gain/loss
5,250,000.00
-
- 350,000.00
- 350,000.00
350,000.00
350,000.00
-
250,000.00
250,000.00
- 250,000.00
-
- 250,000.00
-
- 150,000.00
- 150,000.00
- 150,000.00 5,100,000.00
Investment
balance
5,250,000.00
- 79,935.85
- 83,286.52
- 86,777.64
5,000,000.00
Investment
balance
5,250,000.00
- 79,935.85
329,935.85
- 83,286.52
- 166,713.48
- 86,777.64
- 63,222.36
5,100,000.00
10-7 Interest Bearing with Realistic Rate
Date sold 1-Jan-18
Face Value 100,000.00

Nominal rate 10% realistic rate
Terms To be paid after 4 years
Machine cost 500,000.00

Acc/ Dep 350,000.00
NBV 150,000.00
1 Gain on sale of marchinery

NBV 150,000.00
Loss on sale - 50,000.00
2 Interest Income
NR 10%
Int. Income 10,000.00
Amortisation Table
Principal Interest
Year Date Payment Income Amortisation Value
0 1-Jan-18 100,000.00
1 31-Dec-18 - 10,000.00 - 100,000.00
2 31-Dec-19 - 10,000.00 - 100,000.00
3 31-Dec-20 - 10,000.00 - 100,000.00
4 31-Dec-21 - 10,000.00 - 100,000.00
3 Current Portion
-
4 Noncurrent Portion
100,000.00
1-Jan-18 Notes Receivables 100,000.00 100,000.00
Acc. Depreciation 350,000.00
Machine 500,000.00
31-Dec-18 Cash 10,000.00

Cash -
Notes Receivables - -
31-Dec-19 Cash 10,000.00

Cash -
31-Dec-20 Cash 10,000.00

Cash -
31-Dec-21 Cash 10,000.00

Cash -
100,000.00
10-8 Interest Bearing with Unrealistic Rate
Interest Payable Annually, One-Time Collection of Principal
Date sold 1-Jan-18
Face Value 2,000,000.00

Nominal rate 10% unrealistic rate
Prevailing rate 12%
Terms 3 years to be paid annually
Interest Annual
Equipment cost 1,000,000.00

Acc/ Dep 150,000.00
NBV 850,000.00
Principal Interest Total

Present Value $1,423,560.50 $480,366.25 $1,903,926.75
OR
Principal 2,000,000.00 200,000.00

PV Factor 0.7117802478 2.4018312682
PV 1,423,560.50 480,366.25 1,903,926.75
Amortisation Table 10.00%

Interest
Year Date Interest Income Collection Amortisation
0 1-Jan-18
1 31-Dec-18 228,471.21 200,000.00 28,471.21
2 31-Dec-19 231,887.76 200,000.00 31,887.76
3 31-Dec-20 235,714.29 200,000.00 35,714.29
1 Gain on sale
PV 1,903,926.75
NBV 850,000.00
1,053,926.75 B
2 Interest Income, 2018 228,471.21 B
3 Carrying amount, 31 Dec 2018 1,932,397.96 A
4 Current portion Nil A
5 Noncurrent portion 1,932,397.96 C
1-Jan-18 Notes Receivables $1,903,926.75

Machine 1,000,000.00
Gain on sale 1,053,926.75
31-Dec-18 Cash 200,000.00

Notes Receivables 28,471.21

31-Dec-19 Cash 200,000.00


31-Dec-20 Cash 200,000.00


Cash 2,000,000.00
Notes Receivables 2,000,000.00
Interest Payable Semi-Annually, One-Time Collection of Principal
Date sold 1-Jan-18
Face Value 2,000,000.00

Nominal rate 10% unrealistic rate
Prevailing rate 12%
Interest Semi-annual

Acc/ Dep 150,000.00
NBV 850,000.00
Interest Total
Present Value $1,409,921.08 $491,732.43 $1,901,653.51
OR
Principal 2,000,000.00 100,000.00

PV Factor 0.7049605404 4.917324326
PV 1,409,921.08 491,732.43 1,901,653.51
12.00% Amortisation Table

Interest
Value Year Date Interest Income Collection
$1,903,926.75 0 1-Jan-18
1,932,397.96 1 30-Jun-18 114,099.21 100,000.00
1,964,285.71 2 31-Dec-18 114,945.16 100,000.00
2,000,000.00 3 30-Jun-19 115,841.87 100,000.00
4 31-Dec-19 116,792.39 100,000.00
5 30-Jun-20 117,799.93 100,000.00
6 31-Dec-20 118,867.92 100,000.00
1 Gain on sale
PV 1,901,653.51
NBV 850,000.00
1,051,653.51 B
3 Carrying amount, 31 Dec 2018 1,930,697.89 B
4 Current portion Nil A
5 Noncurrent portion 1,930,697.89 D
$1,903,926.75 1-Jan-18 Notes Receivables 1,901,653.51

Machine
Gain on sale
30-Jun-18 Cash 100,000.00

Interest Income
$28,471.21 Notes Receivables 14,099.21

Interest Income
31-Dec-18 Cash 100,000.00

Interest Income

Interest Income
30-Jun-19 Cash 100,000.00

Interest Income

Interest Income
31-Dec-19 Cash 100,000.00

- 2,000,000.00 Interest Income

Interest Income
30-Jun-20 Cash 100,000.00

$0.00 Interest Income

Interest Income
31-Dec-20 Cash 100,000.00

Interest Income

Interest Income
Cash 2,000,000.00
Notes Receivables
ime Collection of Principal Interest Payable Annually, Uniform Collection
Date sold 1-Jan-18
Face Value 1,800,000.00

Nominal rate 10%
Prevailing rate 12%
Interest Annual

Acc/ Dep 150,000.00
NBV 850,000.00
Principal
Year Balance
0 1,800,000.00
1 1,200,000.00
2 600,000.00
3 -
10.00% 12.00% Amortisation Table
Amortisation Value Year Date

1,901,653.51 0 1-Jan-18
14,099.21 1,915,752.72 1 31-Dec-18
14,945.16 1,930,697.89 2 31-Dec-19
15,841.87 1,946,539.76 3 31-Dec-20
16,792.39 1,963,332.15
17,799.93 1,981,132.08
18,867.92 2,000,000.00
1 Gain on sale
PV
NBV
2 Interest Income, 2018
3 Carrying amount, 31 Dec 2018
4 Current portion
5 Noncurrent portion
$1,901,653.51 1-Jan-18 Notes Receivables

Acc. Depreciation
1,000,000.00 Gain on sale
1,051,653.51 Machine
31-Dec-18 Cash
$14,099.21 Notes Receivables

31-Dec-19 Cash

31-Dec-20 Cash

Cash
100,000.00 Notes Receivables
$16,792.39
16,792.39
100,000.00
$17,799.93
17,799.93
100,000.00
$18,867.92
18,867.92
2,000,000.00 - 2,000,000.00
-
st Bearing with Unrealistic Rate
st Payable Annually, Uniform Collection of Principal
unrealistic rate
rs to be paid annually
Principal Interest Total PV

Payment Payment Payment PVF Value
600,000.00 180,000.00 780,000.00 0.8929 696,462.00

600,000.00 120,000.00 720,000.00 0.7972 573,984.00
600,000.00 60,000.00 660,000.00 0.7118 469,788.00
1,740,234.00
10.00% 12.00%
Interest Principal Principal
Interest Income Collection Amortisation Repayment Value Balance
1,740,234.00 1,800,000.00
208,828.08 180,000.00 28,828.08 600,000.00 1,169,062.08 1,200,000.00
140,287.45 120,000.00 20,287.45 600,000.00 589,349.53 600,000.00
70,721.94 60,000.00 10,650.47 600,000.00 - -
1,740,234.00
850,000.00
890,234.00 B
208,828.08 B
1,169,062.08
1,169,062.08 A - 600,000.00
20,287.45
579,712.55 B 589,349.53
589,349.53 A
Receivables 1,740,234.00 1,740,234.00

Depreciation 150,000.00
890,234.00
1,000,000.00
180,000.00
180,000.00
Receivables 28,828.08 28,828.08

28,828.08
120,000.00
120,000.00
Receivables 20,287.45 20,287.45

20,287.45
60,000.00
60,000.00
Receivables 10,650.47 10,650.47

10,650.47
1,800,000.00
Receivables 1,800,000.00 - 1,800,000.00
-
10-11 Non-interest Bearing
Non-Uniform Collection of Principal
Date sold 1-Jan-18
Face Value 1,800,000.00

Nominal rate
Prevailing rate 12%
Interest Annual

Acc/ Dep 150,000.00
NBV 850,000.00
Principal Principal Interest

Year Balance Payment Payment
0 1,800,000.00
1 800,000.00 1,000,000.00 -
2 200,000.00 600,000.00 -
3 - 200,000.00 -
Amortisation Table
Year Date Interest Income Amortisation

0 1-Jan-18
1 31-Dec-18 181,629.60 181,629.60
2 31-Dec-19 83,425.15 83,425.15
3 31-Dec-20 21,436.17 21,365.25
1 Gain on sale
PV 1,513,580.00
NBV 850,000.00
663,580.00 B
3 Carrying amount, 31 Dec 2018 695,209.60 A
4 Current portion 516,574.85 B
5 Noncurrent portion 178,634.75 D
1-Jan-18 Notes Receivables 1,513,580.00

Gain on sale
Machine
31-Dec-18 Notes Receivables 181,629.60

Interest Income

Interest Income

Interest Income
Cash 1,800,000.00
Notes Receivables
10-12 Non-Interest Bearing
One-time Collection of Principal
Date sold 1-Jan-18
Face Value 1,800,000.00

Nominal rate 10%
Prevailing rate 12%
Terms To be paid after 3 years
Interest Nil

Acc/ Dep 150,000.00
NBV 850,000.00
Total PV Present Value $1,281,204.45

Payment PVF Value OR
1,000,000.00 0.8929 892,900.00 Principal 1,800,000.00

600,000.00 0.7972 478,320.00 PV Factor 0.7117802478
200,000.00 0.7118 142,360.00 PV 1,281,204.45
1,513,580.00
10.00% 12.00% Amortisation Table

Principal Principal
Repayment Value Balance Year Date
1,513,580.00 1,800,000.00 0 1-Jan-18
1,000,000.00 695,209.60 800,000.00 1 31-Dec-18
600,000.00 178,634.75 200,000.00 2 31-Dec-19
200,000.00 - - 3 31-Dec-20
1 Gain on sale
PV
NBV
2 Interest Income, 2018
695,209.60 3 Carrying amount, 31 Dec 2018

- 600,000.00
83,425.15 4 Current portion
178,634.75
5 Noncurrent portion
1,513,580.00 1-Jan-18 Notes Receivables

Acc. Depreciation
663,580.00 Gain on sale
1,000,000.00 Machine
181,629.60 31-Dec-18 Notes Receivables



Cash
1,800,000.00 - 1,800,000.00 Notes Receivables
-
nterest Bearing 10-13 Computation of Annual Payme
time Collection of Principal
Date sold 1-Jan-18
Face Value 1,500,000.00

unrealistic rate Nominal rate
Prevailing rate 12%
paid after 3 years Terms 3 years to be paid annually
Interest Annual
Principal
Year Balance
0 1,500,000.00
1 1,000,000.00
2 500,000.00
3 -
OR
Total Payment
PVF of ordinary annuity payme
Annual Payment
12.00% Amortisation Table
Interest Income Amortisation Value Year Date

1,281,204.45 0 1-Jan-18
153,744.53 153,744.53 1,434,948.98 1 31-Dec-18
172,193.88 172,193.88 1,607,142.86 2 31-Dec-19
192,857.14 192,857.14 1,800,000.00 3 31-Dec-20
Interest Income
Principal
1,281,204.45 Year Balance
850,000.00 0 1-Jan-18
431,204.45 B 1 31-Dec-18
2 31-Dec-19
153,744.53 B 3 31-Dec-20
1,434,948.98 A OR
Total Payment
Nil B PVF of annuity due payment
Annual Payment
1,434,948.98 A
Amortisation Table
Year Date
0 1-Jan-18
Receivables 1,281,204.45 1,281,204.45 1 31-Dec-18
Depreciation 150,000.00 2 31-Dec-19
431,204.45 3 31-Dec-20
1,000,000.00
Receivables 153,744.53 153,744.53

153,744.53
Receivables 172,193.88 172,193.88

172,193.88
Receivables 192,857.14 192,857.14

192,857.14
1,800,000.00
Receivables 1,800,000.00 - 1,800,000.00
-
utation of Annual Payment Collection
rs to be paid annually

500,000.00 - 500,000.00 0.8929 446,450.00

500,000.00 - 500,000.00 0.7972 398,600.00
500,000.00 - 500,000.00 0.7118 355,900.00
1,200,950.00
1,500,000.00 1,200,950.00
f ordinary annuity payment 2.401831 2.401800
al Payment 624,523.47 500,020.82
12.00%
Principal Principal
Interest Income Amortisation Repayment Value Balance
1,200,950.00 1,500,000.00
144,114.00 144,114.00 500,000.00 845,064.00 1,000,000.00 355,886.00
101,407.68 101,407.68 500,000.00 446,471.68 500,000.00 398,592.32
53,576.60 53,528.32 500,000.00 - - 446,471.68
1,200,950.00
180,000.00 - 1,200,950.00
-

500,000.00 - 500,000.00 1.00 500,000.00
500,000.00 - 500,000.00 0.8929 446,450.00
500,000.00 - 500,000.00 0.7972 398,600.00
1,345,050.00
1,500,000.00
f annuity due payment 3.401831
al Payment 440,938.98
0.12
Principal Principal
Interest Income Amortisation Repayment Value Balance
1,345,050.00 1,500,000.00
500,000.00 845,050.00 1,000,000.00 500,000.00

101,406.00 101,406.00 500,000.00 446,456.00 500,000.00 398,594.00
53,574.72 53,544.00 500,000.00 - - 446,456.00
-
1,345,050.00
- 1,345,050.00
-
Computation of Annual Payment Collection
Date sold 1-Jan-18
Face Value 2,000,000.00

Nominal rate
Prevailing rate 10%
Interest Annual
Principal Principal Interest Total

Year Balance Payment Payment Payment PVF
0 2,000,000.00
1 1,500,000.00 500,000.00 - 500,000.00 0.9091
2 1,000,000.00 500,000.00 - 500,000.00 0.8264
3 500,000.00 500,000.00 - 500,000.00 0.7513
4 - 500,000.00 - 500,000.00 0.683
Total Payment 2,000,000.00 1,584,900.00

PVF of ordinary annuity payment 3.169865 3.169865
Annual Payment 630,941.61 499,989.68
Amortisation Table 10.00%

Principal
Year Date Interest Income Amortisation Repayment Value
0 1-Jan-18 1,584,900.00
1 31-Dec-18 158,490.00 158,490.00 500,000.00 1,243,390.00
2 31-Dec-19 124,339.00 124,339.00 500,000.00 867,729.00
3 31-Dec-20 86,772.90 86,772.90 500,000.00 454,501.90
4 31-Dec-21 45,450.19 45,498.10 500,000.00 -
Principal Principal Interest Total

Year Balance Payment Payment Payment PVF
0 1-Jan-18 500,000.00 - 500,000.00 1.00
1 31-Dec-18 500,000.00 - 500,000.00 0.8929
2 31-Dec-19 500,000.00 - 500,000.00 0.7972
3 31-Dec-20
4 31-Dec-21
OR
Total Payment 2,000,000.00
PVF of annuity due payment 3.486852
Annual Payment 573,583.28
Amortisation Table 0.12

Principal
Year Date Interest Income Amortisation Repayment Value
1,345,050.00
0 1-Jan-18 500,000.00 845,050.00
1 31-Dec-18 101,406.00 101,406.00 500,000.00 446,456.00
2 31-Dec-19 53,574.72 53,544.00 500,000.00 -
3 31-Dec-20

PV
Value
454,550.00
413,200.00
375,650.00
341,500.00
1,584,900.00
Principal
Balance
2,000,000.00
1,500,000.00 341,510.00
1,000,000.00 375,661.00
500,000.00 413,227.10
- 454,501.90
1,584,900.00
- 1,584,900.00
-
PV
Value
500,000.00
446,450.00
398,600.00
1,345,050.00
Principal
Balance
2,000,000.00
1,500,000.00 500,000.00
1,000,000.00 398,594.00
500,000.00 446,456.00
-
1,345,050.00
- 1,345,050.00
-
Acquisition date 1-Jan-17
Face value 4,000,000.00

NR 12%
EIR 10%
Principal $2,483,685.29
Interest $1,819,577.65
$4,303,262.94
Fair Value 12.31.17 At 10%

Interest Premium
Year Date Interest Income collection Amortisation
0 1-Jan-17
1 31-Dec-18 430,326.29 480,000.00 - 49,673.71
2 31-Dec-19 425,358.92 480,000.00 - 54,641.08
3 31-Dec-20 419,894.82 480,000.00 - 60,105.18
4 31-Dec-21 413,884.30 480,000.00 - 66,115.70
5 31-Dec-22 407,272.73 480,000.00 - 72,727.27
Yield rate 9%
Principal $2,833,700.84
Interest $1,555,065.54
$4,388,766.39

Interest Premium
30-Dec-99
0 31-Dec-18
1 31-Dec-19 394,988.97 480,000.00 - 85,011.03
2 31-Dec-20 387,337.98 480,000.00 - 92,662.02
3 31-Dec-21 378,998.40 480,000.00 - 101,001.60
4 31-Dec-22 369,908.26 480,000.00 - 110,091.74
Yield rate 11%

Principal $2,924,765.53
Interest $1,172,983.06
$4,097,748.59
Interest Premium
30-Dec-99
0 31-Dec-18
0 31-Dec-19
1 31-Dec-20 450,752.34 480,000.00 - 29,247.66
2 31-Dec-21 447,535.10 480,000.00 - 32,464.90
3 31-Dec-22 443,963.96 480,000.00 - 36,036.04
A Reclass from FVPL:
FV Changes
Value Year Date FV CV

$4,303,262.94 1-Jan-18
$4,253,589.24 0 31-Dec-18 $4,388,766.39 $4,303,262.94
$4,198,948.16 1 31-Dec-19 $4,097,748.59 $4,388,766.39
$4,138,842.98
$4,072,727.27
$4,000,000.00
1-Jan-17 Investment in Debt Securities at FVPL $4,303,262.94
Cash
31-Dec-18 Cash 480,000.00

Interest Income
Investment in Debt Securities at FVPL $85,503.44
Value Unrealised gain - P/L
$4,388,766.39 31-Dec-19 Cash 480,000.00

$4,303,755.36 Interest Income
$4,211,093.34
$4,110,091.74 Unrealised loss - P/L $291,017.80
$4,000,000.00 Investment in Debt Securities at FVPL
A.1 To FAAC
Investment in Debt Securities at FAAC $4,097,748.59

Investment in Debt Securities at FVPL
Value
Interest
Date Interest Income collection
31-Dec-19
$4,097,748.59 31-Dec-20 $450,752.34 480,000.00
$4,068,500.93 31-Dec-21 $447,535.10 480,000.00
$4,036,036.04 31-Dec-22 $443,963.96 480,000.00
$4,000,000.00
31-Dec-20 Cash 480,000.00
Interest Income
Investment in Debt Securities at FAAC
31-Dec-21 Cash 480,000.00

Interest Income
31-Dec-22 Cash 480,000.00

Interest Income
B Reclass from FVOCI:
FV changes
Year Date FV PV
1-Jan-18
0 31-Dec-18 $4,388,766.39 $4,253,589.24
1 31-Dec-19 $4,097,748.59 $4,198,948.16
1-Jan-17 Investment in Debt Securities at FVOCI $4,303,262.94

Cash
31-Dec-18 Cash 480,000.00

Interest Income
Investment in Debt Securities at FVOCI
Investment in Debt Securities at FVOCI $135,177.15

31-Dec-19 Cash 480,000.00

Interest Income
Unrealised gain - OCI $135,177.15

Unrealised loss - OCI $101,199.57
B.1 To FAAC
Investment in Debt Securities at FAAC $4,198,948.16

Old amortisation table (continuation)

Interest
31-Dec-19
31-Dec-20 $419,894.82 480,000.00
31-Dec-21 $413,884.30 480,000.00
31-Dec-22 $407,272.73 480,000.00
31-Dec-20 Cash 480,000.00

Interest Income
31-Dec-21 Cash 480,000.00

Interest Income
31-Dec-22 Cash 480,000.00
Interest Income
C Reclass from FAAC:
31-Dec-18 Investment in Debt Securities at FAAC $4,303,262.94

Cash
31-Dec-19 Cash 480,000.00

Interest Income
31-Dec-20 Cash 480,000.00

Interest Income
C.1 To FVOCI
Interest
Interest Income
31-Dec-19
31-Dec-20 419,894.82 480,000.00
31-Dec-21 413,884.30 480,000.00
31-Dec-22 407,272.73 480,000.00
Interest
31-Dec-19
31-Dec-20 $450,752.34 480,000.00
31-Dec-21 $447,535.10 480,000.00
31-Dec-22 $443,963.96 480,000.00
Amortisation of reclassification loss

31-Dec-20
31-Dec-21
31-Dec-22
Investment in Debt Securities at FVOCI $4,097,748.59

Reclassification loss - OCI $101,199.57
31-Dec-20 Cash 480,000.00

Interest Income
FV change entry

Reclassification loss - OCI
31-Dec-21 Cash 480,000.00

Interest Income
FV change entry

31-Dec-22 Cash 480,000.00

Interest Income
FV change entry

Cash 4,000,000.00
FV Changes
CY
$85,503.44
-$291,017.80
Investment
Balance
$4,303,262.94
$4,303,262.94
480,000.00
-
$85,503.44
$85,503.44
480,000.00
$291,017.80 - 291,017.80
$4,097,748.59
A.2 To FVOCI

New EIR 11.00%
Premium
Amortisation Value Date Interest Income
$4,097,748.59 31-Dec-19
-$29,247.66 $4,068,500.93 31-Dec-20 $450,752.34
-$32,464.90 $4,036,036.04 31-Dec-21 $447,535.10
-$36,036.04 $4,000,000.00 31-Dec-22 $443,963.96
31-Dec-20 Cash
$450,752.34 Interest Income
$29,247.66 Investment in Debt Securities at FVOCI
FV change entry
31-Dec-21 Cash
32,464.90 Investment in Debt Securities at FVOCI
FV change entry
31-Dec-22 Cash
36,036.04 Investment in Debt Securities at FVOCI
FV change entry
FV Changes FV Changes
Cumulative CY
$135,177.15
-$101,199.57 -$236,376.72
Investment
Balance
$4,303,262.94
$4,303,262.94
430,326.29
49,673.71 - 49,673.71
$135,177.15
$135,177.15
425,358.92
54,641.08 - 54,641.08
$236,376.72 -$236,376.72
$4,097,748.59
B.2 To FVPL
Investment in Debt Securities at FVPL

$4,097,748.59 Reclassification loss
$101,199.57 Investment in Debt Securities at FVOCI
10%
Premium
Amortisation Value
$4,198,948.16
-$60,105.18 $4,138,842.98
-$66,115.70 $4,072,727.27
-$72,727.27 $4,000,000.00
31-Dec-20 Cash
60,105.18
FV change entry
31-Dec-21 Cash
66,115.70
FV change entry
31-Dec-22 Cash
72,727.27
FV change entry
Investment
Balance
$4,303,262.94
$4,303,262.94
430,326.29
49,673.71 - 49,673.71
425,358.92
54,641.08 - 54,641.08
$4,198,948.16
C.2 To FVPL
Original EIR At 10%

Premium
Amortisation Value
$4,198,948.16
- 60,105.18 $4,138,842.98
- 66,115.70 $4,072,727.27
- 72,727.27 $4,000,000.00
New EIR 11.00%

Premium
Amortisation Value
$4,097,748.59
-$29,247.66 $4,068,500.93
-$32,464.90 $4,036,036.04
-$36,036.04 $4,000,000.00
$30,857.53
$33,650.81
$36,691.24

Reclassification loss
$4,198,948.16 Investment in Debt Securities at FAAC
31-Dec-20 Cash
60,105.18 - 60,105.18
FV change entry
$30,857.53
$30,857.53
31-Dec-21 Cash
66,115.70 - 66,115.70
FV change entry
$33,650.81
$33,650.81
31-Dec-22 Cash
72,727.27 - 72,727.27
FV change entry
$36,691.24
$36,691.24
4,000,000.00 - 4,000,000.00
$0.00
$4,097,748.59
$4,097,748.59
New EIR 11.00%
Interest Premium
collection Amortisation Value
$4,097,748.59
480,000.00 -$29,247.66 $4,068,500.93
480,000.00 -$32,464.90 $4,036,036.04
480,000.00 -$36,036.04 $4,000,000.00
480,000.00
$450,752.34
$29,247.66
480,000.00
$447,535.10
32,464.90
480,000.00
$443,963.96
36,036.04
$4,097,748.59
$101,199.57
$4,097,748.59
$101,199.57
480,000.00
480,000.00
480,000.00
480,000.00
480,000.00
480,000.00
$4,097,748.59
$101,199.57
$4,198,948.16
480,000.00
480,000.00
480,000.00
480,000.00
480,000.00
480,000.00
ASSUNCION 10-26
Principal Amount 4,000,000.00

Origination fees received - 342,100.00
Direct origination cost incurred 150,020.00
3,807,920.00
Interest Discount
Year Date Interest Income Collecttion Amortisation
0 1-Jan-18
1 31-Dec-18 456,923.10 400,000.00 56,923.10
2 31-Dec-19 463,753.47 400,000.00 63,753.47
3 31-Dec-20 471,403.43 400,000.00 71,403.43
1 Carrying value, 1/1 3,807,920.00 A
2 Effective rate 12.00% C
3 Interest Income 456,923.10 B
4 Carrying value, 12/31 3,864,843.10 A
5 Current portion, 12/31 NIL A
EMPLEO PROBLEM 8 RUBY CORPORATION
C&M: FVPL CORRECT ENTRIES
1-Dec-17 50
20-Jan-18 Face value 500,000.00 20-Jan-18

Purchase price at 102 510,000.00
Accrued interest bought 6,250.00 6,250.00
Interest rate 9%
Maturity Date 1-Jun-22
Days Outstanding from Jan 20 40.00

1-Mar-18 Consideration received 106,000.00 1-Mar-18
Interest Income sold 1,000.00 1,125.00
105,000.00 986.30
Value of 100K bonds 102,000.00
Gain on sale 3,000.00
1-Jun-18 Remaining bonds 400000 1-Jun-18

Nominal rate 9%
Interest Income 18000
1-Nov-18 Consideration received 104,750.00 1-Nov-18

Interest Income sold 3,750.00
101,000.00
Value of 100K bonds 102,000.00
Loss on called bonds - 1,000.00
1-Dec-18
Purchase value 510,000.00
Sold 100K 102,000.00
Remaining value 408,000.00 31-Dec-18
Remaining bonds 100000

Nominal rate 9% 31-Dec-18
Interest Income sold 3,750.00
1-Dec-18 Remaining bonds 300,000.00

Nominal rate 9%
31-Dec-18 Remaining bonds 300,000.00

Nominal rate 9%
PROBLEM 9 ONE DREAM

8%
C&M: FVOCI Date Interest Income

1-Jan-17
Face Value: 2,000,000.00 30-Jun-17 72,600.00
Purchase Pric 1,815,000.00 31-Dec-17 73,104.00
Nominal rate 6% 8.12%
Maturity 31-Dec-22 30-Jun-18 66,815.74
Term 6-year bonds 31-Dec-18 67,336.06
30-Jun-19 67,877.50
31-Dec-19 68,440.93
30-Jun-20 69,027.24
31-Dec-20 69,637.34
30-Jun-21 70,272.22
31-Dec-21 70,932.87
30-Jun-22 71,620.35
31-Dec-22 72,335.74
CORRECT ENTRIES
2-Jan-17
30-Jun-17
31-Dec-17
Sold 200K Bonds

Proceeds from 195,000.00
CV 195,000.00
Gain on sale - 31-Dec-17
FV Changes FV
31-Dec-17 1,950,000.00
31-Dec-18 1,728,000.00
31-Dec-17
30-Jun-18
31-Dec-18
31-Dec-18
At 31 Dec 2017
Statement of Financial Position
For the year ended

31 Dec 2017
Statement of Comprehensive Income
Interest Income
Gain on sale
Statement of Other Comprehensive Income

12.00%
Value
3,807,920.00
3,864,843.10
3,928,596.57
4,000,000.00
ECT ENTRIES CORRECTING ENTRIES
Debt securities at FVPL 510,000.00 Interest receivable

Interest receivable 6,250.00 Debt securities at FVPL
Cash 516,250.00
Cash 106,000.00 Debt securities at FVPL
Debt securities at FVPL 102,000.00 Interest Income
Interest Income 1,000.00 Gain on sale
Gain on sale 1,750.00 Interest receivable

Interest Income 13,000.00 Interest Income
Interest receivable 5,000.00 Interest receivable

Loss on called bonds 1,000.00 Loss on called bonds
Debt securities at FVPL 102,000.00 Interest Income

Interet Receivable 2,250.00 Interet Receivable

Debt securities at FVPL 3,000.00 Debt securities at FVPL

Unrealised gain - P/L 3,000.00 Unrealised gain - P/L
FV of bonds 300,000.00 309,000.00
CV 510,000.00
Sold 100K 102,000.00
Called 100K 102,000.00 306,000.00
Unrealised gain - P/L 3,000.00
6% 8%
Interest Interest
collected Amortisation Value Date Income
1,815,000.00 1-Jan-17
60,000.00 12,600.00 1,827,600.00 30-Jun-17 72,600.00
60,000.00 13,104.00 1,840,704.00 31-Dec-17 73,104.00
- 195,000.00 30-Jun-18 73,628.16
1,645,704.00 31-Dec-18 74,173.29
54,000.00 12,815.74 1,658,519.74 30-Jun-19 74,740.22
54,000.00 13,336.06 1,671,855.80 31-Dec-19 75,329.83
54,000.00 13,877.50 1,685,733.30 30-Jun-20 75,943.02
54,000.00 14,440.93 1,700,174.24 31-Dec-20 76,580.74
54,000.00 15,027.24 1,715,201.47 30-Jun-21 77,243.97
54,000.00 15,637.34 1,730,838.82 31-Dec-21 77,933.73
54,000.00 16,272.22 1,747,111.04 30-Jun-22 78,651.08
54,000.00 16,932.87 1,764,043.91 31-Dec-22 79,397.12
54,000.00 17,620.35 1,781,664.26
54,000.00 18,335.74 1,800,000.00
ECT ENTRIES CORRECTING ENTRIES
Debt securities at FVOCI 1,815,000.00

Cash 1,815,000.00
Cash 60,000.00 Debt securities at FVOCI

Cash 60,000.00 Debt securities at FVOCI

Cash 195,000.00 Unrealised gain - OCI

Unrealised gain - OCI 10,929.60 Gain on sale - P/L
Gain on sale - P/L 10,929.60
Cumulative
CV G/L CY G/L
1,840,704.00 109,296.00 109,296.00
1,671,855.80 56,144.20 - 53,151.80
Debt securities at FVOCI 109,296.00 Debt securities at FVOCI

Unrealised gain - OCI 109,296.00 Unrealised gain - OCI
Cash 54,000.00
Cash 54,000.00
Unrealised loss - 56,144.20

1,755,000.00
ensive Income
145,704.00
10,929.60
mprehensive Income
98,366.40
Unadjusted
balance
274,000.00
6,250.00
6,250.00 - 6,250.00
4,000.00 4,000.00
1,000.00
1,750.00
1,250.00
18,000.00 18,000.00
13,000.00
5,000.00
2,750.00 2,750.00
1,000.00
3,750.00
13,500.00 13,500.00
13,500.00
2,250.00
2,250.00
3,000.00 3,000.00
3,000.00
309,000.00
6% 7.97%
Interest Interest
collected Amortisation Value Date Income
1,815,000.00 1-Jan-17
60,000.00 12,600.00 1,827,600.00 30-Jun-17 72,322.94
60,000.00 13,104.00 1,840,704.00 31-Dec-17 72,813.97
60,000.00 13,628.16 1,854,332.16 30-Jun-18 73,324.58
60,000.00 14,173.29 1,868,505.45 31-Dec-18 73,855.53
60,000.00 14,740.22 1,883,245.66 30-Jun-19 74,407.63
60,000.00 15,329.83 1,898,575.49 31-Dec-19 74,981.74
60,000.00 15,943.02 1,914,518.51 30-Jun-20 75,578.72
60,000.00 16,580.74 1,931,099.25 31-Dec-20 76,199.49
60,000.00 17,243.97 1,948,343.22 30-Jun-21 76,845.00
60,000.00 17,933.73 1,966,276.95 31-Dec-21 77,516.23
60,000.00 18,651.08 1,984,928.03 30-Jun-22 78,214.20
60,000.00 19,397.12 2,004,325.15 31-Dec-22 78,939.99
Unadjusted
balance
1,500,000.00
27
72,600.00 72,600.00
72,600.00
73,104.00 73,104.00
73,104.00
10,929.60
10,929.60
109,296.00 109,296.00
109,296.00
1,755,000.00
6%
Interest
collected Amortisation Value
1,815,000.00
60,000.00 12,322.94 1,827,322.94
60,000.00 12,813.97 1,840,136.91
60,000.00 13,324.58 1,853,461.49
60,000.00 13,855.53 1,867,317.01
60,000.00 14,407.63 1,881,724.64
60,000.00 14,981.74 1,896,706.38
60,000.00 15,578.72 1,912,285.10
60,000.00 16,199.49 1,928,484.59
60,000.00 16,845.00 1,945,329.59
60,000.00 17,516.23 1,962,845.81
60,000.00 18,214.20 1,981,060.01
60,000.00 18,939.99 2,000,000.00
BS ACCOUNTANCY
QUIZ NO. 3
On 01 March 2018, Entity E lends 10 million to Entity F at a fixed interest rate of 8% payable semi-annuall
demand early repayment at par plus accrued interest if Entity F’s interest cover ratio (ratio of profit befor
market rate of interest for similar loans is 6%.
Use 7 decimal places. Include the 2 decimals on each values.
8%
Year Date Principal balance Principal repayment Interest Payment

0 1-Mar-18 10,000,000.0000
1 31-Aug-18 10,000,000.0000 400,000.0000
2 28-Feb-19 7,500,000.0000 2,500,000.0000 400,000.0000
3 31-Aug-19 7,500,000.0000 300,000.0000
4 29-Feb-20 5,000,000.0000 2,500,000.0000 300,000.0000
5 31-Aug-20 5,000,000.0000 200,000.0000
6 28-Feb-21 3,000,000.0000 2,000,000.0000 200,000.0000
7 31-Aug-21 3,000,000.0000 120,000.0000
8 28-Feb-22 1,500,000.0000 1,500,000.0000 120,000.0000
9 31-Aug-22 1,500,000.0000 60,000.0000
10 28-Feb-23 - 1,500,000.0000 60,000.0000
10,000,000.0000 2,160,000.0000
Amortisation Table 6.00% 8.00%
Year Date Interest Income Interest Collection Amortisation

0 1-Mar-18
1 31-Aug-18 314,470.6900 400,000.0000 - 85,529.3100
2 28-Feb-19 311,904.8100 400,000.0000 - 88,095.1900
3 31-Aug-19 234,261.9500 300,000.0000 - 65,738.0500
4 29-Feb-20 232,289.8100 300,000.0000 - 67,710.1900
5 31-Aug-20 155,258.5100 200,000.0000 - 44,741.4900
6 28-Feb-21 153,916.2600 200,000.0000 - 46,083.7400
7 31-Aug-21 92,533.7500 120,000.0000 - 27,466.2500
8 28-Feb-22 91,709.7600 120,000.0000 - 28,290.2400
9 31-Aug-22 45,861.0600 60,000.0000 - 14,138.9400
10 28-Feb-23 45,436.8900 60,000.0000 - 14,563.1100
1,677,643.4900 2,160,000.0000 - 482,356.5100
Assuming on the same problem, on 28 Feb 2021, Entity E change its business portfolio management whereas,
collection until maturity and through sale. The loan is quoted at 98% at such date.
31-Dec-20 FVOCI
FAAC
Principal balance 3,000,000.00

Quotation 0.98
2,940,000.00
9.47% 8.00%

0 28-Feb-21
1 31-Aug-21 139,240.78 120,000.00 19,240.78
2 28-Feb-22 140,152.04 120,000.00 20,152.04
3 31-Aug-22 70,065.24 60,000.00 10,065.24
4 28-Feb-23 70,541.94 60,000.00 10,541.94
420,000.00 360,000.00 60,000.00

OR
9.460% 8.00%

0 28-Feb-21
1 31-Aug-21 139,067.8800 120,000.0000 19,067.8800
2 28-Feb-22 139,969.8300 120,000.0000 19,969.8300
3 31-Aug-22 69,961.4400 60,000.0000 9,961.4400
4 28-Feb-23 71,000.8500 60,000.0000 11,000.8500
420,000.0000 360,000.0000 60,000.0000
12 Revised EIR 9.460%

144,458.35
Premium
Effective Original Amortisation
31-Aug-21 19,067.8800 - 27,466.2500 46,534.1300
28-Feb-22 19,969.8300 - 28,290.2400 48,260.0700
31-Aug-22 9,961.4400 - 14,138.9400 24,100.3800
28-Feb-23 11,000.8500 - 14,563.1100 25,563.9600
13 Carrying value as at 31 Dec 2021

CV, last interest 2,959,067.88
Discount amortisation (4 months)
19,969.83 13,313.22
2,972,381.10
14 Reclassification loss - OCI as at 31 August 2021

97,924.22
15 Interest Income for 2022

28-Feb-22 139,067.8800 46,355.9600
31-Aug-22 139,969.8300 139,969.8300
28-Feb-23 69,961.4400 46,640.9600
Entity A anticipates capital expenditure in a few years. The entity invests its excess cash in short and long-term
when the need arises. Many of the financial assets have contractual lives that exceed the entity’s anticipated in
to collect the CCF and, when an opportunity arises, it will sell financial assets to re-invest the cash in financial a
The managers responsible for the portfolio are remunerated based on the overall return generated by the portf
On 1 June 2018, the portfolio manager of Entity A decided to extended a 10% loan to a third party with a face
105,000 direct origination cost has been incurred.
Entity A's reporting period end is every December 31st.
Use the interpolation using High-Low Rate. Use 7 decimals points for EIR. Include 2 decimal points for value.
8.360% 10%
Date Interest Income Interest Collected Amortisation
1-Jun-18
1 31-May-19 269,606.17 300,000.00 - 30,393.83
2 31-May-20 267,065.28 300,000.00 - 32,934.72
3 31-May-21 264,311.98 300,000.00 - 35,688.02
4 31-May-22 261,328.50 300,000.00 - 38,671.50
5 31-May-23 258,095.61 300,000.00 - 41,904.39
6 31-May-24 254,592.45 300,000.00 - 45,407.55
OR
8.378% 10%
Date Interest Income Interest Collected Amortisation
1-Jun-18
1 31-May-19 270,178.5700 300,000.0000 - 29,821.4300
2 31-May-20 267,680.2400 300,000.0000 - 32,319.7600
3 31-May-21 264,972.6100 300,000.0000 - 35,027.3900
4 31-May-22 262,038.1400 300,000.0000 - 37,961.8600
5 31-May-23 258,857.8400 300,000.0000 - 41,142.1600
6 31-May-24 255,411.1000 300,000.0000 - 44,588.9000
FV CV
1-Jun-18 3,225,000.0000
31-Dec-18 104 3,120,000.0000 3,207,604.1700
31-May-19 105 3,150,000.0000 3,195,178.5700
31-Dec-19 98 2,940,000.0000 3,176,325.3800
31-May-20 95 2,850,000.0000 3,162,858.8100
31-Dec-20 93 2,790,000.0000 3,142,426.1700
31-May-21 90 2,700,000.0000 3,127,831.4200
31-Dec-21 95 2,850,000.0000 3,105,687.0000
31-May-22 100 3,000,000.0000 3,089,869.5600
31-Dec-22 100 3,000,000.0000 3,065,869.9700
31-May-23 98 2,940,000.0000 3,048,727.4000
31-Dec-23 101 3,030,000.0000 3,022,717.2100
31-May-24 102 3,060,000.0000 3,004,138.5000
16 Effective interest rate 8.377630%
17 Amortised cost as at 31 Dec 19 3,176,325.38

31-May-20 267,680.24
31-May-21 264,972.61
19 Unrealised gain/loss - OCI cumulative as at 31 Dec 2020
- 352,426.17
20 Unrealised gain.loss - OCI for 2020

- 116,100.79
21 Amortised cost as at 31 Dec 2021 3,105,687.00

31-May-22 262,038.14
31-May-23 258,857.84
3 23 Fair value as at 31 May 22 3,000,000.00
Assuming on 30 June 2022, the portfolio manager sold half of the financial asset to anoth
Answer the following:
Proceeds
Interest sold
Unrealised loss
Carrying value of the FA 31 May 22

Premium Amortisation for 1 month
Gain or loss on sale
Amortised cost, 31 May 22

24 Carrying value, 30 June 2022
25 Gain or loss on sale

terest rate of 8% payable semi-annually; the loan is repayable in five years, as below. Entity E has the right to
terest cover ratio (ratio of profit before interest cost to interest) falls below a specified level. The prevailing
6%
Total Payments PV Factor PV of Cash Flows

1
400,000.0000 0.9708738 388,349.5200
2,900,000.0000 0.9425959 2,733,528.1100 2
300,000.0000 0.9151417 274,542.5100
2,800,000.0000 0.8884870 2,487,763.6000 3
200,000.0000 0.8626088 172,521.7600
2,200,000.0000 0.8374843 1,842,465.4600 4
120,000.0000 0.8130915 97,570.9800
1,620,000.0000 0.7894092 1,278,842.9000 5
60,000.0000 0.7664167 45,985.0000
1,560,000.0000 0.7440939 1,160,786.4800
12,160,000.0000 10,482,356.3200
Principal
Repayment Value Principal balance
10,482,356.3200 10,000,000.0000
- 10,396,827.0100 10,000,000.0000 7
- 2,500,000.0000 7,808,731.8200 7,500,000.0000
- 7,742,993.7700 7,500,000.0000 8
- 2,500,000.0000 5,175,283.5800 5,000,000.0000
- 5,130,542.0900 5,000,000.0000 9
- 2,000,000.0000 3,084,458.3500 3,000,000.0000
- 3,056,992.1000 3,000,000.0000
- 1,500,000.0000 1,528,701.8600 1,500,000.0000
- 1,514,562.9200 1,500,000.0000
- 1,500,000.0000 - 0.1900 - 10
- 10,000,000.0000
11
ness portfolio management whereas, the FA will be assessed through realisation via
uch date.
2,940,000.00
144,458.35
3,084,458.35
Principal
2,940,000.00 3,000,000.00 28-Feb-21
- 2,959,240.78 3,000,000.00 31-Aug-21
- 1,500,000.00 1,479,392.82 1,500,000.00 28-Feb-22
- 1,489,458.06 1,500,000.00 31-Aug-22
- 1,500,000.00 0.00 - 28-Feb-23
- 3,000,000.00
Principal
2,940,000.0000 3,000,000.0000
- 2,959,067.8800 3,000,000.0000
- 1,500,000.0000 1,479,037.7100 1,500,000.0000
- 1,488,999.1500 1,500,000.0000
- 1,500,000.0000 - -
- 3,000,000.0000
Checking
2021 2,940,000.00
- 27,466.25
46,534.13
2022 - 28,290.24
97,924.2200 48,260.07
49,664.1500 - 14,138.94
25,563.7700 24,100.38
- 0.1900 - 1,500,000.00
2023 - 14,563.11
25,563.96
- 1,500,000.00
-
232,966.75
its excess cash in short and long-term financial assets so that it can fund the expenditure
s that exceed the entity’s anticipated investment period. The entity will hold financial assets
ssets to re-invest the cash in financial assets with a higher return.
he overall return generated by the portfolio.
10% loan to a third party with a face value of P3,000,000, payable after 6 years. A total of
. Include 2 decimal points for value.
Value
3,225,000.0000
3,194,606.17
3,161,671.45
3,125,983.43
3,087,311.93
3,045,407.55
3,000,000.00
Value
3,225,000.0000 Principal
3,195,178.5700 Interest
3,162,858.8100
3,127,831.4200
3,089,869.5600
3,048,727.4000 8%
3,004,138.5000 X
- 4,138.5000 10%
Cumm. G/L CY G/L
- 87,604.1700 - 87,604.1700 Method 1

- 45,178.5700 42,425.6000 = LR% + [(HR-LR) * (PV of LR - PV of X)]
- 236,325.3800 - 191,146.8100
- 312,858.8100 - 76,533.4300 8.38%
- 352,426.1700 - 39,567.3600
- 427,831.4200 - 75,405.2500 = HR% - [(HR-LR) * (PV of X - PV of LR)]
- 255,687.0000 172,144.4200
- 89,869.5600 165,817.4400 8.37763%
- 65,869.9700 23,999.5900
- 108,727.4000 - 42,857.4300
7,282.7900 116,010.1900
55,861.5000 48,578.7100
3,225,000.00
3,134,577.56
- 52,372.78
- 142,795.22
0.3667684387
8.36677%
111,533.43
154,567.36
266,100.79
109,182.56
151,000.41
260,182.97
d half of the financial asset to another party for 1,605,000.
1,605,000.00 1,605,000.00
12,500.00 12,500.00
1,592,500.00 1,592,500.00
- 44,934.78
1,547,565.22
1,500,000.00 1,544,934.7800
- 1,714.26 - 1,714.26
1,498,285.74 1,543,220.52
49,279.48 49,279.48
1,544,934.78
- 1,714.26
1,543,220.52
49,279.48
1,498,285.74
49,279.48
he right to
revailing
PV of total cash flows as at 1 Mar 2018 10,482,356.32
PV Factor for cash flows on 31 Aug 2021 0.8130915
Total Gross Cash Flow collections 12,160,000.00
Interest collected on 31 Aug 2018 400,000.00
Interest Income for 2019 493,090.09

28-Feb-19 311,904.81 103,968.27
31-Aug-19 234,261.95 234,261.95
29-Feb-20 232,289.81 154,859.87
Premium amortisation for 2019 - 140,243.24

28-Feb-19 - 88,095.19 - 29,365.06
31-Aug-19 - 65,738.05 - 65,738.05
29-Feb-20 - 67,710.19 - 45,140.13
Amortised cost as at 29 Feb 2020 5,175,283.58
Principal balance as at 31 Aug 2021 3,000,000.00
Interest collected in 2022 180,000.00

Premium amortisation for 2023 - 4,854.37
If the financial asset is reclassified to FVPL on 31 Aug 2022, what would be th- 104,562.92
Loss
PV Cash Flows @
Principal Interest Total Payments PV Factor @ 7% 7%
120,000.00 120,000.00 0.9661835749 115,942.0300

1,500,000.00 120,000.00 1,620,000.00 0.9335107004 1,512,287.3300
60,000.00 60,000.00 0.9019427057 54,116.5600
1,500,000.00 60,000.00 1,560,000.00 0.8714422277 1,359,449.8800
3,360,000.00 3,041,795.8000
7% 3,041,795.8000
8% 2,940,000.0000 101,795.8000
9% 2,959,048.5600 - 19,048.5600
82,747.2400
= 7% + [(HR-LR) * (PV of LR - PV of X)]
9.46%
= 9% - [(HR-LR) * (PV of X - PV of LR)]

9.46%
PV at 9% PV at 8% PV at 10%
3,000,000.00 1,788,801.98 1,890,508.88 1,693,421.79
300,000.00 1,345,775.58 1,386,863.90 1,306,578.21
3,225,000.00 3,134,577.56 3,277,372.78 3,000,000.00
3,277,372.78 8%
3,225,000.00 3,225,000.00 52,372.78 X 3,225,000.00
3,000,000.00 225,000.00 9%
277,372.78
Method 2
R) * (PV of LR - PV of X)] = LR% + [(HR-LR) * (PV of LR - PV of X)]
PV of LR - PV of HR PV of LR - PV of HR
8.36676844%
R) * (PV of X - PV of LR)] = HR% - [(HR-LR) * (PV of X - PV of LR)]

PV of LR - PV of HR PV of LR - PV of HR
8.36677%
3,277,372.78
3,277,372.78
1,410,000.00
1,514,562.92
- 104,562.92
PV Cash Flows @
PV Factor @ 9% 9%
0.956937799 114,832.5400
0.9157299512 1,483,482.5200
0.8762966041 52,577.8000
0.8385613436 1,308,155.7000
2,959,048.5600
8.367%
PV at 11% Date Interest Income
1,603,922.51 1-Jun-18
1,269,161.36 1 31-May-19 270,178.5700
2,873,083.87 2 31-May-20 267,680.2400
3 31-May-21 264,972.6100
4 31-May-22 262,038.1400
3,277,372.78 5 31-May-23 258,857.8400
3,225,000.00 52,372.78 6 31-May-24 255,411.1000
3,134,577.56 90,422.44
142,795.22
6/1/2018
12/31/2018 104
- PV of X)] 5/31/2019 105
f LR - PV of HR 12/31/2019 98
5/31/2020 95
12/31/2020 93
- PV of LR)] 5/31/2021 90
f LR - PV of HR 12/31/2021 95
5/31/2022 100
12/31/2022 100
5/31/2023 98
12/31/2023 101
5/31/2024 102
16 Effective interest rate
17 Amortised cost as at 31 Dec 19

19 Unrealised gain/loss - OCI cumulative as at 31 Dec 20
20 Unrealised gain.loss - OCI for 2020
21 Amortised cost as at 31 Dec 2021
23 Fair value as at 31 May 22
Assuming on 30 June 2022, the portfolio manager so

Answer the following:
Proceeds
Interest sold
Unrealised loss
Carrying value of the FA 31 May 22

Amortised cost, 31 May 22

24 Carrying value, 30 June 2022
25 Gain or loss on sale

10%
Interest Collected Amortisation Value
3,225,000.0000
300,000.0000 - 29,821.4300 3,195,178.5700
300,000.0000 - 32,319.7600 3,162,858.8100
300,000.0000 - 35,027.3900 3,127,831.4200
300,000.0000 - 37,961.8600 3,089,869.5600
300,000.0000 - 41,142.1600 3,048,727.4000
300,000.0000 - 44,588.9000 3,004,138.5000
4,138.5000
FV CV Cumm. G/L CY G/L
3,225,000.0000
3,120,000.0000 3,207,604.1700 - 87,604.1700 - 87,604.1700
3,150,000.0000 3,195,178.5700 - 45,178.5700 42,425.6000
2,940,000.0000 3,176,325.3800 - 236,325.3800 - 191,146.8100
2,850,000.0000 3,162,858.8100 - 312,858.8100 - 76,533.4300
2,790,000.0000 3,142,426.1700 - 352,426.1700 - 39,567.3600
2,700,000.0000 3,127,831.4200 - 427,831.4200 - 75,405.2500
2,850,000.0000 3,105,687.0000 - 255,687.0000 172,144.4200
3,000,000.0000 3,089,869.5600 - 89,869.5600 165,817.4400
3,000,000.0000 3,065,869.9700 - 65,869.9700 23,999.5900
2,940,000.0000 3,048,727.4000 - 108,727.4000 - 42,857.4300
3,030,000.0000 3,022,717.2100 7,282.7900 116,010.1900
3,060,000.0000 3,004,138.5000 55,861.5000 48,578.7100
nterest rate 8.366770%
cost as at 31 Dec 19 3,176,325.38
come for 2020

31-May-20 267,680.24 111,533.43
31-May-21 264,972.61 154,567.36
266,100.79
d gain/loss - OCI cumulative as at 31 Dec 2020
- 352,426.17
d gain.loss - OCI for 2020

- 116,100.79
cost as at 31 Dec 2021 3,105,687.00
come for 2022

31-May-22 262,038.14 109,182.56
31-May-23 258,857.84 151,000.41
260,182.97
as at 31 May 22 3,000,000.00
on 30 June 2022, the portfolio manager sold half of the financial asset to another party for 1,605,000.
e following:
1,605,000.00
12,500.00
1,592,500.00
- 44,934.78
1,547,565.22
alue of the FA 31 May 22 1,500,000.00

Amortisation for 1 month - 1,714.26
1,498,285.74
49,279.48
cost, 31 May 22
Amortisation for 1 month
alue, 30 June 2022 1,498,285.74
49,279.48
rty for 1,605,000.
1,605,000.00
12,500.00
1,592,500.00
1,544,934.7800
- 1,714.26
1,543,220.52
49,279.48
1,544,934.78
- 1,714.26
1,543,220.52
49,279.48
PROBABILITY OF DEFAULT - 2 SCENARIOS
16-9 Banko Co
1 !2-month expected credit losses
ECL PD X LGD X EAD

ECL 2% 25% 13,000,000.00
2 ECL 65,000.00
PROBABILITY OF DEFAULT - INCORPORATION OF FORWARD-LOOKING INFORMATION (SCENARIOS)

16-10 Dayan
Principal 24,000,000.00 Non-interest bearing loan

EIR 6%
Risk fre 4.00%
Credit r 2.40%
Nominal Rate
Amortisation Table
Interest Principal
Date Interest Income Collection Amortisation Repayments
0 1-Jan-19
1 31-Dec-19 1,280,000.00 - 1,280,000.00 4,800,000.00
2 31-Dec-20 1,054,720.00 - 1,054,720.00 4,800,000.00
3 31-Dec-21 815,022.08 - 815,022.08 4,800,000.00
4 31-Dec-22 559,983.49 - 559,983.49 4,800,000.00
5 31-Dec-23 290,274.43 - 290,274.43 4,800,000.00
Expected Credit Loss Computation

FO
Contractual No default cash Cash Shortfall *
Date Cashflows PD @ 70% flows PD
0 1-Jan-19
1 31-Dec-19 4,800,000.00 70% 4,800,000.00 -
2 31-Dec-20 4,800,000.00 70% 4,800,000.00 0
3 31-Dec-21 4,800,000.00 70% 4,800,000.00 0
4 31-Dec-22 4,800,000.00 70% 4,800,000.00 0
5 31-Dec-23 4,800,000.00 70% 4,800,000.00 0
24,000,000.00
3 Lifetime expected credit loss
Annual Cash flow
Annuity Factor
Lifetime ECL
4 12-month expected credit losses

Annual cash shortfall
PV factor of 1 after 1st period
5 Amortisation Table
Cash Shortfall
Date Interest Income Realised
1-Jan-19
31-Dec-19 112,007 420,000
31-Dec-20 92,295 420,000
31-Dec-21 71,322 420,000
31-Dec-22 49,007 420,000
31-Dec-23 25,263 420,000
5 Journal Entries
1-Jan-19 Investment to Delimma Company 20,000,000.00

Cash 20,000,000.00
Impairment Loss 1,750,106.00

Allowance for ECL 1,750,106.00
31-Dec-19 Investment to Delimma Company 1,280,000.00

Interest Income 1,280,000.00
Cash 4,380,000.00
Allowance for ECL 420,000.00
Investment to Delimma Company 4,800,000.00

Net investment balance
Checking
PROVISION OF MATRIX - PRACTICAL EXPEDIENT (Simplified approach)

16-11 Intensity
Principal 21,350,000.00
Reporting per 31-Dec-19
Specifically identified receivables 550,000.00
Provision matrix Group A Group B

Not past due 0.30% 0.30%
1-30 days past due 1.20% 1.50%
31-60 days past due 3.30% 3.90%
61-90 days past due 8.00% 7.20%
>90 days past due 11.50% 8.30%
Groups are classified based on theire share credit risk characteristics.

Maturity less than one year therefore, use simplified approach.
Group A Group B
Gross Carrying Gross Carrying
Amount Lifetime ECL rate Amount
Not past due 5,700,000.00 0.30% 3,700,000.00
1-30 days past due 3,000,000.00 1.20% 1,200,000.00
31-60 days past due 1,000,000.00 3.30% 1,500,000.00
61-90 days past due 2,200,000.00 8.00% 800,000.00
>90 days past due 800,000.00 11.50% 900,000.00
12,700,000.00 8,100,000.00
1 Lifetime ECL 574,000.00
Receivables 21,350,000.00
ECL - 1,124,000.00
Trade receivables, n 20,226,000.00
16-12 ECL on FVOCI Assets

Face Value 2,000,000.00
Fair Value 1,900,000.00
Nominal Rate 5.0000%
Effective Rate 6.1932%
Impairment 10,000.00
6.1932% 5%
Interest Principal
Date Interest Income Collection Amortisation Collection
0 1-Jan-19
1 31-Dec-19 117,671 100,000 17,671 -
2 31-Dec-20 118,766 100,000 18,766 -
3 31-Dec-21 119,928 100,000 19,928 -
4 31-Dec-22 121,162 100,000 21,162 -
5 31-Dec-23 122,473 100,000 22,473 -
Journal Entries
1 1-Jan-19 Investment in Debt Securities - FVOCI 1,900,000.00

Cash
Impairment loss 10,000.00

Loss allowance - OCI
2 31-Dec-19 Cash 100,000

Investment in Debt Securities - FVOCI 17,671
Interest Income
On Dec 31, 2019, there was a changes in the credit risk as follows:
Original FV FV - Only the Prime Rate Change

EIR EIR EIR
Prime rate 4.000% 4.250% 4.250%

Credit Spread 2.193% 2.750% 2.193%
6.193% 7.000% 6.443%
Original Overall EIR change

6.193% 7.000%
Face Value PV Factor Fair Value PV Factor
Principal 2,000,000.00 0.79 1,572,688.47 0.76
Interest 100,000.00 3.45 344,982.87 3.39
1,917,671.34
Change in Prime Change due to

Change in FV rate only credit risk
Fair Value 1,864,512 1,900,988 1,864,512
Carrying Value 1,917,671 1,917,671 1,900,988
- 53,160 - 16,683 - 36,476
-
3 No change in credit risk
ECL Journal entries

Revised balance - 36,476
Beginning balance - 10,000 5 Impairment loss
- 26,476 Other comprehensive income - a
Other comprehensive income
Investment in FVOCI
Accretion of interest 17,671
Change due to prime rate - 16,683
Change due to credit risk - 36,476 6 Carrying value as at 31 Dec 2019
Total change in FV - 35,488
Fair Value 1,864,512 Investment in Bonds, 1/2019

Amortized cost 1,917,671 Amortisation
Decrease in fair value - 53,160 Decrease in FV
Less: Decrease in FV due to credi- 26,476 Impairment loss
OCI - change - 26,683 Investment in Bonds, 12/2019
4 Market rate of interest

7.000%
16-13 ECL - Derecognition
Principal 5,000,000.00 SHOULD BE NON-INTEREST BEARING

NR 12%
YR 13%
Maturity 31-Dec-22
Interest PaymSemi-annual
13.0000% 0%
Interest Principal
0 1-Jan-19
1 30-Jun-19 196,375 - 196,375
2 31-Dec-19 209,140 - 209,140 -
3 30-Jun-20 222,734 - 222,734
4 31-Dec-20 237,211 - 237,211 -
5 30-Jun-21 252,630 - 252,630
6 31-Dec-21 269,051 - 269,051 -
7 30-Jun-22 286,539 - 286,539
8 31-Dec-22 305,164 - 305,164 -
Matuirty value 5,000,000

Less: Allowance for ECL - 433,000
4,567,000
Prepare the journal entry using the following independent scenarios:
1 The Company collected P4,567,000
Cash 4,567,000
Allowance for ECL 433,000
Investment in FAAC 5,000,000
Cash 5,000,000

Impairment gain 433,000
Impairment loss 67,000

Cash 4,500,000
16-13 Impairment of Financial Asset at Amortised Cost - Credit Impaired
Principal 4,000,000.00
NR 10%
YR 12%
Maturity 31-Dec-19
12% 10%
Interest Principal
0 1-Jan-16
1 31-Dec-16 450,830 400,000 50,830
2 31-Dec-17 456,930 400,000 56,930
3 31-Dec-18 463,762 400,000 63,762
4 31-Dec-19 471,558 400,000 71,558
31-Dec-17
PV of expected cash flows 3,188,800

Carrying value 3,864,680
Impairment loss - 675,880 B
12% 10%
Interest Principal
0 1-Jan-16
1 31-Dec-16
2 31-Dec-17
3 31-Dec-18 382,656 - 382,656
4 31-Dec-19 428,544 - 428,544
Interest Income for 2018
Interest Income 382,656 D
16-14 Reversal of Impairment on Financial Asset at Amortised Cost

NR 10%
YR 12%
Maturity 31-Dec-19
0% 0%
Interest Principal
0 1-Jan-16
1 31-Dec-16 450,830 - 450,830
2 31-Dec-17 504,930 - 504,930
3 31-Dec-18 565,522 - 565,522
4 31-Dec-19 633,529 - 633,529
RMATION (SCENARIOS)
Present Value of Future Cash Flows
Amortised Cost Principal Balance Date Principal Balance

20,000,000.00 24,000,000.00 1-Jan-19 24,000,000.00
16,480,000.00 19,200,000.00 31-Dec-19 19,200,000.00
12,734,720.00 14,400,000.00 31-Dec-20 14,400,000.00
8,749,742.08 9,600,000.00 31-Dec-21 9,600,000.00
4,509,725.57 4,800,000.00 31-Dec-22 4,800,000.00
- 0.00 - 31-Dec-23 -
FORWARD-LOOKING ECONOMIC SCENARIOS

Cash Shortfall *
PD @ 20% Collection PD PD @ 10% Collection
20% 3,600,000.00 240,000.00 10% 3,000,000.00

20% 3,600,000.00 240,000.00 10% 3,000,000.00
20% 3,600,000.00 240,000.00 10% 3,000,000.00
20% 3,600,000.00 240,000.00 10% 3,000,000.00
20% 3,600,000.00 240,000.00 10% 3,000,000.00
1,200,000.00 1,800,000.00
420,000.00
4.17
1,750,106.00
420,000.00
0.94
394,716.00
Impairment
Amortisation Balance
1,750,106
- 307,993 1,442,113
- 327,705 1,114,408
- 348,678 765,730
- 370,993 394,737
- 394,737 0
Investment Allowance
20,000,000.00
- 1,750,106.00
1,280,000.00
420,000.00
- 4,800,000.00
- 112,006.78
16,480,000.00 - 1,442,112.78
estment balance 15,037,887.22
15,037,887.22
Group B Group A Group B Total

Lifetime ECL Lifetime ECL Lifetime ECL
Lifetime ECL rate allowance allowance allowance
0.30% 17,100.00 11,100.00 28,200.00
1.50% 36,000.00 18,000.00 54,000.00
3.90% 33,000.00 58,500.00 91,500.00
7.20% 176,000.00 57,600.00 233,600.00
8.30% 92,000.00 74,700.00 166,700.00
354,100.00 219,900.00 574,000.00
Carrying Value
1,900,000
1,917,671
1,936,437
1,956,365
1,977,527
2,000,000
1,900,000.00
10,000.00
117,671
nly the Prime Rate Change
EIR change Change in Prime rate only

6.443%
Fair Value PV Factor Fair Value
1,525,790.42 0.78 1,557,965.53
338,721.13 3.43 343,022.51
1,864,511.55 1,900,988.04
Investment
1,917,671.34
26,476
omprehensive income - accumulated impairm 26,476
omprehensive income 53,160
ment in FVOCI 53,160 - 53,160
1,864,511.55
g value as at 31 Dec 2019 1,864,511.55
- 0.00
ment in Bonds, 1/2019 1,900,000

17,671
- 26,683
- 26,476
ment in Bonds, 12/2019 1,864,512
Carrying Value PV @ 13%
3,021,156
3,217,531 Cashflow 5,000,000.00
3,426,671 PV Factor 0.6042
3,649,404 3,021,155.94
3,886,615
4,139,245
4,408,296
4,694,836
5,000,000
433,000
Carrying Value PVF

3,756,920 Principal 4,000,000.00 0.635518
3,807,750 Interest 400,000.00 3.03735
3,864,680
3,928,442
4,000,000
0.15
Using the Original EIR

PVF
Principal 4,000,000.00 0.797194
Interest
Carrying Value
3,188,800
3,571,456
4,000,000
4,000,000
Cash 400,000
Investment in FAAC 63,762
Interest Income 463,762

Carrying Value
3,756,920
4,207,750
4,712,680
5,278,202
5,911,731
5,911,731.35
Cash Flows
Cashflow collection Interest Total Payment PV Factor PV of cash flows

0 1.00000 -
4,800,000.00 4,800,000.00 0.93980 4,511,040.00
4,800,000.00 4,800,000.00 0.88330 4,239,840.00
4,800,000.00 4,800,000.00 0.83020 3,984,960.00
4,800,000.00 4,800,000.00 0.78020 3,744,960.00
4,800,000.00 4,800,000.00 0.73330 3,519,840.00
24,000,000.00 20,000,640.00
Total Cash
Cash Shortfall * PD Shortfall
180,000.00 420,000.00 1
180,000.00 420,000.00 1
180,000.00 420,000.00 1
180,000.00 420,000.00 1
180,000.00 420,000.00 1
2,100,000.00 2
OCI
- 10,000.00
- 26,476.49
53,160
16,683.29
PV @ 12%
2,542,072
1,214,940
3,757,012
3,756,920
92 Imm
Date Interest Income Amortised Cost

PV @ 12% 31-Dec-17 675,880
3,188,776 31-Dec-18 81,106 756,986
- 31-Dec-19 90,838 847,824
3,188,776
3,188,800
- 24 Imm
Sample Problem
Original FV
EIR EIR
Prime rate 4.000% 4.250%
Credit Spread 2.193% 2.693%
6.193% 6.943%
Original
6.193%
Face Value PV Factor Fair Value
Principal 1,000,000.00 0.79 786,345.07
Interest 50,000.00 3.45 172,491.55
958,836.62
Change in Prime
Change in FV rate only
Fair Value 934,095 950,495
Carrying Value 958,837 958,837
- 24,741 - 8,342
Accretion of interest income

Change due to prime rate
Change due to credit risk
Total change in fair value
Fair Value
Amortized cost
Decrease in fair value
Less: Decrease in FV due to credit risk = impairment
OCI - change
Expected credit loss

Revised balance
Beginning balance
When these financial assets are derecognised, the cumulative gains and losses pre
* Based on the accounting treatment described above, the ECLs do not reduce the ca
Instead, an amount equal to the ECL allowance that would arise if the asset were m
This means that in contrast to financial assets measured at amortised cost, there is
reserve in accumulated other comprehensive income, with a corresponding charge
Amortised Cost Amount
3,864,680 3,188,800
3,928,442 3,171,456
4,000,000 3,152,176
FV - Only the Prime Rate Change
EIR
4.250% 0
2.193% 1
6.443% 2
3
Overall EIR change Change in Prime rate only 4
6.943% 6.443% 5
PV Factor Fair Value PV Factor Fair Value
0.76 764,517.27 0.78 778,983.59
3.39 169,577.95 3.43 171,511.37
934,095.22 950,494.96
Change due to
credit risk Journal Entries:
934,095
950,495 Investment in FVOCI
- 16,400 Cash
Impairment loss
8,835 Other comprehensive income
- 8,342
- 16,400
- 15,906
Investment in Debt Securities
934,095 Interest Income
958,837
- 24,741 Impairment loss
- 11,400 * Other comprehensive income - accumulated im
- 13,342 Other comprehensive income
Investment in Debt Securities
- 16,400
- 5,000 (negative)
- 11,400
Investment in Bonds, 1/2019

Amortisation
Decrease in FV
Impairment loss
Investment in Bonds, 12/2019
d, the cumulative gains and losses previously recognised in other comprehensive income are reclassified (i.e., ‘recycled’) from e
d above, the ECLs do not reduce the carrying amount of the financial assets in the statement of financial position, which remain
ce that would arise if the asset were measured at amortised cost is recognised in other comprehensive income as the ‘accumula
s measured at amortised cost, there is no separate allowance but, instead, impairment gains or losses are accounted for as an a
e income, with a corresponding charge to profit or loss (which is then reflected in retained earnings).
6.1932% 5%
Interest Interest Principal
Date Income Collection Amortisation Collection Carrying Value
1-Jan-18 950,000
31-Dec-18 58,835 50,000 8,835 - 958,835
31-Dec-19 59,383 50,000 9,383 - 968,218
31-Dec-20 59,964 50,000 9,964 - 978,182
31-Dec-21 60,581 50,000 10,581 - 988,762
31-Dec-22 61,238 50,000 11,238 - 1,000,000
Investment OCI
950,000 950,000
950,000
5,000
5,000 - 5,000.00
950,000 - 5,000
8,835 8,835
8,835
11,400
come - accumulated imp 11,400 - 11,400
24,741 24,741
24,741 - 24,741
934,094 8,342
934,095
- 1
950,000
8,835
- 13,342
- 11,400
934,094
(i.e., ‘recycled’) from equity to profit or loss as a reclassification adjustment.
position, which remains at fair value.

come as the ‘accumulated impairment amount’.
e accounted for as an adjustment of the revaluation

At the end of the first reporting period following acquisition of the bond, Etihad expectS to receive 8M at matu
years.
At the end of the 2nd reporting period, Etihad now expects to receive 9M at maturity. This results in favorable
At the end of the 3rd reporting period, Etihad now expects to receive 7M at maturity. This results in unfavorabl
giving rise to revised loss allowance.
At the end of the 4th reporting period, the bond matures and Etihad receives 7M as it had expected at the last
NR 0
Maturity 31-Dec-18
SUMMARY
31-Dec-15 31-Dec-16 31-Dec-17

Opening Amortised Cost 6,000,000.00 6,447,419.59 7,794,228.63
Accrued Interest on AC at 7.4 447,419.59 480,783.64 581,215.10
Impairment gain or (loss) 866,025.40 - 1,861,209.72
Closing AC 6,447,419.59 7,794,228.63 6,514,234.01
LOAN LOSS ALLOWANCE RECONCILIATION
Opening loss allowance - - 866,025.40

Unwinding of interest on openi - - 64,579.46
Impairment gain or (loss) - 866,025.40 - 1,861,209.72
Closs loss allowance - 866,025.40 - 930,604.86
Journal Entries
1-Jan-15 FAAC 6,000,000.00

Amortised Cost 6,000,000.00
31-Dec-15 FAAC 447,419.59

31-Dec-16 FAAC 480,783.64

Allowance for lifetime ECL 866,025.40

Impairment Gain 866,025.40
31-Dec-17 FAAC 516,635.64

Impairment loss 1,861,209.72

Allowance for lifetime ECL 1,861,209.72
31-Dec-18 FAAC 555,161.13

tihad expectS to receive 8M at maturity of the bond, after 4
at maturity. This results in favorable change in lifetime ECL.

t maturity. This results in unfavorable change in lifetime ECL
es 7M as it had expected at the last reporting date.
2015 7.46%
Interest Interest
31-Dec-18 Income Collected Amortisation
6,514,234.01 1-Jan-15
485,765.99 31-Dec-15 447,419.59 - 447,419.59
31-Dec-16 480,783.64 - 480,783.64
7,000,000.00 31-Dec-17 516,635.64 - 516,635.64
31-Dec-18 555,161.13 - 555,161.13
2016
Interest Interest
- 930,604.86 Date Income Collected Amortisation
- 69,395.14 1-Jan-15
- 31-Dec-15
- 1,000,000.00 31-Dec-16
31-Dec-17 581,215.10 - 581,215.10
31-Dec-18 624,556.27 - 624,556.27

FAAC Bal. Allowance Bal.
6,000,000.00
2017 & 2018
Interest Interest
Date Income Collected Amortisation
447,419.59 1-Jan-15
31-Dec-15
6,447,419.59 - 31-Dec-16
6,447,419.59 31-Dec-17
31-Dec-18 485,765.99 - 485,765.99
480,783.64
- 866,025.40
6,928,203.23 - 866,025.40
7,794,228.63
516,635.64
- 64,579.46
1,861,209.72
7,444,838.87 930,604.86
6,514,234.01
555,161.13
69,395.14
8,000,000.00 1,000,000.00
7,000,000.00
Amortised Cost
6,000,000.00
6,447,419.59
6,928,203.23
7,444,838.87
8,000,000.00
Revised
Amortised Cost Original

Cumulative change in undiscounted lifetime ECL
7,794,228.63 PVF
8,375,443.73
Interest Interest
9,000,000.00 OR Date Income Collected Amortisation
31-Dec-16
31-Dec-17 64,579.46 0 64,579.46
31-Dec-18 69,395.14 0 69,395.14
Amortised Cost Revised

Original
Cumulative change in undiscounted lifetime ECL
6,514,234.01 PVF
7,000,000.00 OR
Interest Interest
Date Income Collected Amortisation
31-Dec-16
31-Dec-17
31-Dec-18 - 69,395.14 0- 69,395.14
9,000,000.00
8,000,000.00
1,000,000.00
0.8660254038
Amortised Cost
866,025.40
930,604.86
1,000,000.00
7,000,000.00
8,000,000.00
- 1,000,000.00
0.9306048591
Amortised Cost
- 930,604.86
- 1,000,000.00

Measurement of Long Term Receivable - Realistic (Nominal) Interest

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DEBT INSTRUMENT

A.1 Interest Bearing - Realistic (nominal) interest

Initial measurement: At fair value or face value

Subsequent measurement: At amortised cost/ face value

A.2 Interest Bearing - Unrealistic (nominal) interest

b. Uniform collection of principal or serial notes

B Non-interest Bearing/ Zero-rated Interest Bearing

at approximates the market rate of interest for the same note, or

ffective rate * Principal) Whereas:

f interest for the similar note to arrive at the fair value.

The PV of the note = Cash Price.

e). The PV of the note = Face Value * PV of 1

). The PV of the note = Periodic Payment * PV of ordinary annuity of 1

rate of interest for similar notes.

INITIAL RECOGNITION AND SUBSEQUENT MEASUREMENT

On 1 January 2018, Ramon purchased P5M term bonds quoted at 105.

Ramon also incurred the following direct costs

Subsequently, the bonds are quoted as follows

Hold to collect till maturity

PP 5,000,000.00 1.05 5,250,000.00

FAAC and FVOCI

Fair value changes - FVOCI, using 4.1932% EIR

Principal Interest Premium

31-Dec-20 300,000.00 220,134.82 79,865.18

Fair value changes - FVOCI, using 4.1932% EIR

1-Jan-18 Investment in Debt Securities - FAAC 5,400,000.00

Interest income is based on effective rate

31-Dec-18 Cash 300,000.00

31-Dec-19 Cash 300,000.00

31-Dec-20 Cash 300,000.00

31-Dec-21 Cash 300,000.00

31-Dec-22 Cash 300,000.00

Assume on the same problem:

Hold to collect till maturity

Consideration 5,000,000.00 5,250,000.00

Less: Carrying value 5,320,443.80

Interest receivable 25,000.00

Interest income 6,356.20

Amortisation value, 31 Dec 18 5,326,800.00

PV of Principal (PV of 1 using effective rate x Principal)

Investment in Debt Securities 4,749,224.91

Years Principal Interest Total PVF

Interest Discount Principal

Assume on the same problem:

31-Dec-19 Debt securities at FVOCI 5,250,000.00

31-Dec-20 Cash 300,000.00

Fair value changes - using 4.2030% original EIR

Amortisation using revised EIR of 4.19170%

Difference between the revised and the old EIR

Reclassification loss - OCI 457.92

Fair value changes - FVOCI

31-Dec-20 5,500,000.00 5,170,064.15 329,935.85 329,935.85

Debt securities at FVOCI 329,935.85

31-Dec-21 Cash 300,000.00

Reclassification loss - OCI 470.52

31-Dec-22 Cash 300,000.00

Debt securities at FVOCI 1,454.04

Unrealised gain - OCI 63,222.36

31-Dec-19 Debt securities at FVPL 5,250,000.00

31-Dec-20 Cash 300,000.00

Debt securities at FVPL 250,000.00