Peter and Co purchase investment properties for which they raise funds by issuing bonds. The liability arising from these bonds is designated to be measured at fair value through profit and loss. In the current year ending on May 31, 2019, the bonds experienced an overall fair value decline of $50m, of which $5m related to a decrease in the credit worthiness of Peter and Co. You have been contacted by the directors of the company to advise them on how to account for this movement in the fair value of the bonds. Support your answer by references to relevant standards.

Answer rating: 100% (QA)

Answer The 45million fair value decline should be recorded in profit or loss and the 5million fair v... View the full answer