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
Long Term Loan
Re: Long Term Loan
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.
Re: Long Term Loan
Were there really no fees in arranging your loan? Is it from a related party at an advantageous rate?