I'm confused by why the expected credit losses don't factor into the fair value. Shouldn't the fair value include the risk of loss and thereby be lower too such that there are no examples of where the fair value is showing a positive gain yet we are told we have a $120K credit loss? Is the AFS security example using equity such as stock? If so, is the example saying the stock value aka fair value increased in fair value and the company had a $120K bad receivable? Why would we even consider an individual transaction of the underlying stock? That would be included in the fair value of the equity/stock price-right? Simply put, why isn't the PV=FV as it should be and then none of these FV vs PV calculations exist?
My left ear really enjoyed this.
Thank you professor.
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I'm confused by why the expected credit losses don't factor into the fair value. Shouldn't the fair value include the risk of loss and thereby be lower too such that there are no examples of where the fair value is showing a positive gain yet we are told we have a $120K credit loss?
Is the AFS security example using equity such as stock? If so, is the example saying the stock value aka fair value increased in fair value and the company had a $120K bad receivable? Why would we even consider an individual transaction of the underlying stock? That would be included in the fair value of the equity/stock price-right? Simply put, why isn't the PV=FV as it should be and then none of these FV vs PV calculations exist?
For HTM, why do we still use FV? I thought we only care about PVFCF - Amort cost = ECL?
Farhat, thanks a million for this content. Just I can only hear your voice on my left headphone, none comes out of the right one
Antonmursid🙏🙏🙏🙏🙏🇲🇨
Have you checked your hears? Just kidding I have the same issue.
Thank you!
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Excelent, but you speak very fast. Please speak slower. Thank
I will try my best. Also, slow me down via RUclips. Please connect with me: linktr.ee/farhatlectures