FV of loan for disclosure
FV of loan for disclosure
Hi guys,
Just one small question.
Do you have to disclose the FV of the loans (liabilities) in the annual report, is that mandatory?
I mean, we calculate our loan at amortized costs but this isn't the fair value.
Thank you!
Just one small question.
Do you have to disclose the FV of the loans (liabilities) in the annual report, is that mandatory?
I mean, we calculate our loan at amortized costs but this isn't the fair value.
Thank you!
Re: FV of loan for disclosure
yes, see paragraphs IFRS 7.25-29; B1-B3 IG14
Re: FV of loan for disclosure
I've looked into few financial report from listed companies, I rarely see company does that in their financial report.
Re: FV of loan for disclosure
I guess you can say that for many loans the difference between FV and amortised cost won't be material and get away without disclosing actual difference
Re: FV of loan for disclosure
What in your case Leo is the indication that FV is different?
Re: FV of loan for disclosure
Hi,
yes. For example, we have a term loan with upfront fees that we book at amortized cost. And the term loan is listed. So I suppose that the IFRS book value might be different that its market value?
If I follow the guidance IFRS, I have to disclose both value, at amortised costs and the FV as well, knowing that it's the one by using amortized cost that I have in my books.
Thank you.
BR
yes. For example, we have a term loan with upfront fees that we book at amortized cost. And the term loan is listed. So I suppose that the IFRS book value might be different that its market value?
If I follow the guidance IFRS, I have to disclose both value, at amortised costs and the FV as well, knowing that it's the one by using amortized cost that I have in my books.
Thank you.
BR
Re: FV of loan for disclosure
Thanks very much
I guess the traded price is an approximation of the future cash flows, discounted at a different market risk rate, plus or minus 'market noise'.
I guess the traded price is an approximation of the future cash flows, discounted at a different market risk rate, plus or minus 'market noise'.
Re: FV of loan for disclosure
Exactly !!!
And what we have actually in our books is discount of the future cash flow with effective interest rates.
So the only difference, its between the EIR and the market rate.
I realize more and more that IFRS it's so Ayatollah.
And what we have actually in our books is discount of the future cash flow with effective interest rates.
So the only difference, its between the EIR and the market rate.
I realize more and more that IFRS it's so Ayatollah.
Last edited by Leo on 07 Jan 2021, 11:08, edited 1 time in total.
Re: FV of loan for disclosure
oh, so your debt is listed? interesting
is it floating rate?
The FV can get different if you're in the industry hit by the pandemic, as changes in credit risk impact FV, but do not impact amortised cost of a liability in issuer's books
is it floating rate?
The FV can get different if you're in the industry hit by the pandemic, as changes in credit risk impact FV, but do not impact amortised cost of a liability in issuer's books
Re: FV of loan for disclosure
Exactly !!!
thank you !!!
No fixe rate.
thank you !!!
No fixe rate.
Re: FV of loan for disclosure
so if it's fixed rate, then this is obviously another factor than can drive FV away from amortised cost