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Title: ACCA Part-2 (F7) IAS 32 _ Financial Instrument _ Presentation
Description: A concise summary of IAS 32 β Financial Instruments (Presentation) for ACCA Part-2 F7 Financial Reporting. Includes formulas, practical ways to remember them, and easy-to-understand notes. Ideal for exam preparation and mastering the presentation of financial instruments.
Description: A concise summary of IAS 32 β Financial Instruments (Presentation) for ACCA Part-2 F7 Financial Reporting. Includes formulas, practical ways to remember them, and easy-to-understand notes. Ideal for exam preparation and mastering the presentation of financial instruments.
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π
IAS 32 - Financial Instrument :
Presentation
Definition
Financial instrument >> any contract that gives rise to both
financial asset of one entity and a financial liability or equity
instrument of another entity
...
to exchange financial assets/ liabilities with another entity >> potentially
favorable
an equity instrument of another entity
Financial Liability
IAS 32 - Financial Instrument : Presentation
1
to deliver cash or another financial asset to another entity
...
Physical assets >> inventories, PPE, ROUA, intangible assets (which have their
own IAS)
2
...
Liabilities (or) assets that are not contractual in nature
...
The two elements must be separately recognized in SOFP
...
IAS 32 - Financial Instrument : Presentation
2
Liability
element
= PV of future cash outflow
= Interest + Principal
= (Sale proceeds* legal rate%* annuity factor of effective rate) +
(Sale proceeds* discount factor of the last yearβs effective rate)
Equity element
= Sale proceeds - Liability element
DR >> Cash (Sale proceeds amount)
CR >> Financial Liability
CR >> Equity
π Step 2 - Allocate Issue Cost
π Step 3 - Subsequent Measurement
Plus (+) or Minus (-)
The equity element is not remeasured at subsequent period
Title: ACCA Part-2 (F7) IAS 32 _ Financial Instrument _ Presentation
Description: A concise summary of IAS 32 β Financial Instruments (Presentation) for ACCA Part-2 F7 Financial Reporting. Includes formulas, practical ways to remember them, and easy-to-understand notes. Ideal for exam preparation and mastering the presentation of financial instruments.
Description: A concise summary of IAS 32 β Financial Instruments (Presentation) for ACCA Part-2 F7 Financial Reporting. Includes formulas, practical ways to remember them, and easy-to-understand notes. Ideal for exam preparation and mastering the presentation of financial instruments.