Using the information given below, calculate the value of financial asset as on 31.12.2018 on the basis that a. It is classified as FVTPL, (2.5 marks) b. Value of impairment if it is classified on Amortization basis (2.5 marks) (Total 5 marks) A commercial company purchased a five-year bond on 1 January 2018 at a cost of OMR 18,000,000. The rate of annual interest on the investment was 10%. Which is also the effective rate payable on 31 December every year. At the reporting date of 31.12.2018, interest has been received as expected and the market rate of interest increased to 12% now. Tute to chapter 6 Practice question : Using the information given below, calculate the value of financial asset as on 31.12.2018 on the basis that a. It is classified as FVTPL, (2.5 marks) b. Value of impairment if it is classified on Amortization basis (2.5 marks) (Total 5 marks) A commercial company purchased a five-year bond on 1 January 2018 at a cost of OMR 18,000,000. The rate of annual interest on the investment was 10%. Which is also the effective rate payable on 31 December every year. At the reporting date of 31.12.2018, interest has been received as expected and the market rate of interest increased to 12% now. a. Calculate the value of asset on 31.12.2018 on FVTPL basis On 31.12.2018 the carrying value of asset was OMR 18,000,000. In the early 2019, it was identified that the bond issuer was beginning to experience some financial difficulties. There was serious doubt regarding full recovery of the amounts due to the investor. An impairment review would be required. The expected future cash-flows now expected by the investor (Commercial entity) from the bond issuer are as under: Year Expected Cash Flow 31 - December -2019 OMR 1,350,000) 31 - December -2020 OMR 1,350,000) 31 - December -2021 (OMR 1,350,000) 31-December -2022 OMR 1,350,000+OMR 14,100,000) b. Calculate the extent of impairment of the financial asset to be included in the financial statements of the investor on 31.12.2019