Financial instruments - Example (amortised cost) - ACCA Financial Reporting (FR)

Financial instruments - Example (amortised cost) - ACCA Financial Reporting (FR)
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[@jennypo4257]

Beautiful presentation...I have been a student and a practitioner but this is the first time that this lesson has been presented so clearly. Best teacher...He does magic.

[@LightningSky541]

Chris The best F7 teacher ever!Love him!❤️

[@jasontsui2256]

This is a very good example of amortised financial asset accounting explaining the relationship between effective interest rate, coupon rate and every year's cash flow of the financial asset such as investment in bonds or debentures

[@tinanguyen8425]

really appreciate your lecture, save me 2 weeks of reading non sense text book

[@bryanhippolyte9519]

Awesome lecture!!!!!!! Clear and so concise, your amazing man.

[@mungolechishala5175]

This lecture is so easy to understand. Thank you.

[@johnpiousgeli7492]

Thanks for putting this together. It's great. Kudos

[@dinny98]

You are Amazing Chris 👏🏽

[@huzaifahumar9214]

Teaching style simple yet so so effective ❤

[@toiningula3966]

Very helpful video, thank you 🙏🏾

[@nomankhan7104]

amazing......thank you very much sir....

[@fathurrazzaq8784]

thanks a lot Chris

[@nimochathurangi]

Well Explained, Thank u so much!

[@Realtruth77710]

chris you are a genius.. hope to meet in real and thank you for your help

[@sarabdeepkaurbhatti3052]

Soo Good
Thank you very much sir

[@ahmadshakeel4924]

thank you very much!!!

[@a.sydney5036]

Lovvvvving this. Love s good refresher video.

[@dal9769]

Thank you very much great teacher

[@studystudyhard4137]

Everything explained well, except the Interest naming as Interest Receivable complicates things (as it seems we are talking about a SFP account, instead of SPL account). It would be better to name Interest as Interest Income, then would be clearly understood.

[@RN-hq5qx]

Correct, I too got confused by naming it Receivable.. though its already explained in amortization table as SPL.. i.e. Income being credited in PL

[@hshariq]

Thank you for clarifying that.
But are you sure of that? Is it interest income for sure, as opposed to interest receivable?

[@nali961]

Amazing ! Thanks sir ❤

[@renjimegdilindcosta5144]

Thanks a lot!

[@user-tu2nj3kd4e]

Thank you Chris!

[@lucatintor4896]

7:01 I think you should distinguish the discount interest 20,000.00 at the begging of the investment than the cp interest 160,000.00 matured in 4 years and the premium Interest at maturity 50,000.00.
Then the 20,000 must be recorded initially and the total of 210,000.00 at the end, that is more clear and understanding.
Regards..

[@anikatabassumteena7650]

Best! Best! Best!

[@ChristosLefkimiotis]

Do you have to account for Interest receivable (£ 230,000), at the inception of the investment?

[@lizadabu9064]

Hi would like to ask why interest receivable has an abnormal balance? Do we have an initial entry debiting the receivable for fill amount?

[@saurabhpitale8284]

Yes I was wondering the same thing

[@KempSanders]

He’s either misspoken, omitted another entry, or just wrong.
If we assume another journal was passed and omitted from the video, then they could nominally book the interest as Dr Interest receivable/Cr Interest received then Dr Loan receivable/Cr Interest receivable, but I’m not sure anyone would waste their time.
Either way, the effective interest in each period must be recognised as income on P&L, and it would be inappropriate to leave it credited to a B/S account. Your auditors would certainly be interested when doing a proof.

[@sharvarisagramsingh1769]

🙌🏽👌🏽

[@KempSanders]

Certainly not crediting interest receivable; crediting interest received, recognising revenue.

[@davide7491]

I have that same issue of the "interest receivable"...It should be interest income or interest received.

[@AbrasionUK]

Interesting tidbit: I messed around in excel and determined that the actual effective interest rate is 5.7212%, not 5.73%, so actually pretty far off.

[@louisjuniorsaah9767]

Hi sir Chris i please I don't understand how we got the 1.05 for the redemption. Can u please take me through that??

[@FemiOGD]

It was redeemed at a premium of 5%

[@depressedwanderer3376]

@@FemiOGD 5% of $100 right? wouldnt that be $5

[@givers1018]

it should be interest income not int rec.

[@blfchanner1958]

You are correct. Interest received is $40,000 while int. income is 56,154 & the difference, 16,154 is the amount debited to Investment as the first year's contribution towards amortizing the overall debenture discount of $70,000 (i.e. 1,050,000 - 980,000)

[@franklyntembo1496]

Cash flow sta

[@shaista9938]

Chris, your lectures are great ,but just need to speak alittle faster instead of monotone...

[@haileybeckham8264]

This is the best speed for learning by all

[@shaista9938]

Where is part 1

[@opentuition]

You can find an index (with links) to all of our lectures on our free website. Click on 'show more' on the note before the comments to see the link.