Long Term Loan

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Gman
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Joined: 28 Oct 2021, 15:23

Long Term Loan

Post by Gman »

Hi,
Query regarding the initial recording of a long term loan received and further restatement.

Background.
Loan agreement €1,000,000
Drawdown 01/01/2021 €500,000
Repayment in 5 years as a lump sum repayment i.e 31/12/2025
Interest paid every qtr

Under IFRS 13 It's my understanding that at initial recognition (01/01/2021) the loan received should be valued at the exit price i.e €500,000

Will the loan remain as €500,000 on the books until it's repaid of does it get revalued somehow?

many thanks
G
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Marek Muc
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Re: Long Term Loan

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DJP
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Re: Long Term Loan

Post by DJP »

I am assuming that the loan is carried at amortised cost. If that is the case, and assuming that there were no transaction costs involved and that the interest rate is a market rate, then the amortised cost of your loan should be the initially recognised amount (500,000) plus accrued interest.
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Marek Muc
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Re: Long Term Loan

Post by Marek Muc »

plus more info on amortised cost here:

https://ifrscommunity.com/knowledge-bas ... rest-rate/
JRSB
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Re: Long Term Loan

Post by JRSB »

Were there really no fees in arranging your loan? Is it from a related party at an advantageous rate?
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