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Title: Financial Accounting: Bond Investment
Description: Summary of accounting for Bond Investment
Description: Summary of accounting for Bond Investment
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Measurement of debt investments is based on:
1
...
Cashflow characteristics
Business model is held for trading or realizing fair value changes:
- This debt investment is measured at fair value through profit or loss
...
Business model is held for collecting contractual cash flows that are composed of interest
and principal:
- This debt investment is measured at amortized cost
...
- Effective interest method:
Interest Income (CV/Beg bal
...
- The entity may elect to use the Fair Value Option on initial purchase of this investment
...
- Recognition and measurement rates are the same as Held for Trading or Realizing Fair
Value Changes
...
(Cash
flows are composed of interest and principal):
- The debt investment is measured at fair value through OCI (FVOCI),
- Initial measurement: Fair value or Purchase price plus transaction cost
- Subsequent measurement: At fair value, and changes in fair value after considering any
impairment loss are recognized in OCI
...
- Interest income is computed using the effective interest method
...
Any cumulative amount in
OCI is transferred to profit or loss (recycling to profit or loss)
Title: Financial Accounting: Bond Investment
Description: Summary of accounting for Bond Investment
Description: Summary of accounting for Bond Investment