IFRScommunity.com

thank you Leo. As a follow up, the option is to acquire 2% of the company shares. Upon exercising the option, I will a. measure the fair value of the option i. if the option is out the money, I recognise 2% of the fair value of the company (nothing on option as out the money) Dr Investment in Subsid...

Hello,

Assuming that you are buying an option, and that hedge accounting is not applied, but the option is only exercisable two years after the contract is entered into.
Should I recognise the FV on the balance sheet still?

Thank you for the help

Okay, thank you. that make sense, at each reporting year end we would have to FV the embedded option, and the 'implied interest' and recognised both as a fair value gain?

Investor, we will give them cash and hold the loan interest free until they repay us, unless we convert the loan into additional equity in the business

Thanks DJP, therefore the equity component's fair value decreases overtime as the present value of the loan increases?, therefore the journal would be DR Carrying amount of investment Cr fair value gain (EIR+fair value loss of equity component)

Hi all, just as a follow up question. Once calculated, the initial recognition journal is Dr FV (net assets) and Cr Gain on bargain purchase? What are the subsequent measurement journal, is it just a year one journal or every year similarly to how Goodwill is done in the pro-forma annual journals.

Hi, is there a difference in the accounting if the shareholder has bought a convertible interest-free loan? If we have to measure the fair value of the equity instrument as well (and measured through PL), do we still calculate an imputed interest at the EIR and process journal entries for the impute...

Hi guys, just a follow up question on investment in associate becoming a subsidiary. If there was goodwill in the associate (carried in the investment carrying amount) and there is goodwill at the date it becomes a subsidiary, what happens to the previously recognised goodwill. Is it eliminated, and...