AC2101 S1 2014 Seminar 8 FA.pptx

80 xyz shares mv4 initial recognition subsequent

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Unformatted text preview: Assets: Recognition Recognized when enterprise becomes a party to the contractual provisions of the instrument §༊  All primary instruments have to be recognized (FRS 39:14) 10 5 28/8/13 Fair Value thru’ P&L: Measurement §༊  Upon recognition Ø།  At fair value (FRS 39:43) Ø།  Transaction costs to be expensed §༊  At B/S date Ø།  Mark to market (FRS 39:46) •  Unrealized holding G/L à༎ P&L (FRS 39:55) Ø།  Illustration 1 11 Recall from S2: FRS 113 – Fair Value Measurement §༊  Framework for measuring fair value (From FRS 113 para IN9) §༊  Determine the particular asset or liability being measured §༊  Determine the market in which an orderly transaction would take place for the asset or liability §༊  Determine the appropriate valuation technique to use §༊  Maximise the use of relevant observable inputs and minimise unobservable inputs. 12 6 28/8/13 Illustration 1. ABC Ltd. (Trading Securities) 15/11/x1 31/12/x1 100K LMN Shares @$2 + expenses $3K 200K XYZ Shares @$3 + expenses $5K LMN Shares’ MV=$1.80 XYZ Shares’ MV=$4 Initial recognition Subsequent reporting date 13 Finan...
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