Describe the subsequent measurement of financial liabilities. What is the default category for subsequent measurement of a

Question:

Describe the subsequent measurement of financial liabilities. What is the default category for subsequent measurement of a financial liability?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Answer rating: 100% (QA)

Paragraph 421 of AASB 9IFRS 9 requires an entity to classify all financial liabilities as subsequently measured at amortised cost using the effective interest rate except a financial liabilities subsequently measured at fair value through the profit or loss including derivatives b financial liabilities that arise when the transfer of a financial assets does not qualify for derecognition or when the continuing involvement in a financial asset approach applies c financial guarantee contracts as defined in Appendix A d commitments to provide a loan at a belowmarket interest rate In accordance with Appendix A of AASB 9IFRS 9 the amortised cost of a financial liability is the amount recognised at initial recognition less principal repayments addless cumulative amortisation using the effective interest method The effective interest method uses the effective interest rate to allocate interest expense over the relevant period The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability to the net carrying amount of the liability The default classification Subsequent measurement at amortised cost is the default classification because it applies in the absence of any other measurement being applicable In contrast to financial assets paragraph 442 of AASB 9IFRS 9 prohibits financial liabilities from being reclassified for subsequent ...View the full answer

Answered By

Muhammad Umair

I have done job as Embedded System Engineer for just four months but after it i have decided to open my own lab and to work on projects that i can launch my own product in market. I work on different softwares like Proteus, Mikroc to program Embedded Systems. My basic work is on Embedded Systems. I have skills in Autocad, Proteus, C++, C programming and i love to share these skills to other to enhance my knowledge too.

3.50+ 1+ Reviews 10+ Question Solved

Related Book For book-img-for-question