IFRS 9 fair value of interest-free concessional sovereign loans

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Storay
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IFRS 9 fair value of interest-free concessional sovereign loans

Post by Storay »

1. If an organisation is offering interest-free concessional sovereign loans to 3rd party countries as part of a developmental mandate how do you deal with the fair value requirement for disclosure of these loans. Could it be assumed that the present value of these loans represent their fair value as it is practically impossible and extremely difficult to establish a market on which similar instruments are being traded to benchmark fair value.
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Marek Muc
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Re: IFRS 9 fair value of interest-free concessional sovereign loans

Post by Marek Muc »

Sure, fair value does not have to be based on quoted prices in this case.

Have a look here:
https://ifrscommunity.com/knowledge-bas ... -hierarchy

But calculation of the appropriate discount rate will still be a challenge.
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