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Question · The day-one difference

Quenlane bank acquires an instrument for 500,000 in cash. Its fair value at the acquisition date is 540,000. Case data: the standard applicable to the instrument requires the day-one difference to be deferred, because fair value rests on unobservable inputs. Record the acquisition entry.

Price paid
500,000
Fair value at acquisition
540,000
Your answer
  1. Line 1

    Account Financial asset at fair value

  2. Line 2

    Account Cash

  3. Line 3

    Account Day-one difference deferral adjustment (reduces the asset)

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