Ferrand has obtained a government loan at a reduced rate, measured under IFRS 9 at 400,000 at initial recognition; the difference from the proceeds received has already been treated as a grant. Case convention: the loan is subsequently measured at amortised cost, at the effective interest rate of 7% given by the case. It pays 20,000 at year-end. Calculate the interest expense and the closing financial liability.
- Initial value of the loan under IFRS 9
- 400,000
- Effective interest rate (case input)
- 7 %
- Payment made at year-end
- 20,000