Nova SA grants a loan measured at amortised cost, whose fair value at origination is 505,000. It receives from the borrower origination fees of 10,000, which are an integral part of the effective interest rate, and incurs direct transaction costs of 5,000. Calculate the net initial amount used to compute the effective interest rate.
- Fair value of the loan at origination
- 505,000
- Origination fees received from the borrower
- 10,000
- Direct transaction costs incurred
- 5,000