Amortised Cost Method

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....le, then Amount received or given of 'Financial Instrument' is considered at Fair Value. If transaction is on the basis of the "Off Market Terms" that means 'market rate on similar instrument' has to consider then Fair Value to be calculated by discounting future cash flows using market interest rate. At Each reporting date, financial instrument has to measure at amortised cost, and so using the....

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.... of discount) Bank A/c Dr. XXX Finance Liability XXX To Financial Asset XXX To Bank XXX [For Actual Interest or Principal installment revised (if any)] [For Actual interest or principal installment paid (if any)] Note:- * Effective Interest Rate is the rate of which present value of future cash flows from the instrument becomes equal to the net cash flow at the beginning. * Transact....