IFRS 9Chapter 7Lesson 1
The effective interest rate and amortised cost
Step 1 of 8Learning objectives
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Amortised cost spreads fees, transaction costs and premiums or discounts over the life of an instrument, using the effective interest rate applied each period to the opening carrying amount.
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Learning objectives
- Define the effective interest rate and say which fees adjust it.
- Establish the initial amount net of fees and transaction costs.
- Build the amortised cost schedule period by period.
- Record the interest and receipts of an asset at amortised cost.