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Financial Instruments - Coggle Diagram
Financial Instruments
Financial Assets (debt intruments)
Fair value through other comprehensive income (FVTOCI)
Initially
Record the asset at fair value
purchase price + transaction costs.
Dr Financial asset x
Cr Cash x
Subsequently
Each year end re-state to fair value.
Any gains / losses recorded in the Investment Reserve (through OCI).
Gain
Dr Financial asset x
Cr Cash x
Loss (The investment reserve can be negative!)
Dr Financial asset x
Cr Cash x
Financial statement extracts
Record at statement of financial position at 31 Dec under
NCA Financial Assets 20X3 x , 20X4 x
Equity-Investment reserve 20X3 (x), 20X4(x)
Record at statement of other comprehensive income at 31 Dec under Gain / (loss) Financial Assets 20X3 (x), 20X4 (x)
Amortised cost
Subsequently
The interest element is recognised in the P&L each year, and the financial asset is held at its carrying amount in the SFP.
Calculate using a table(formula)
Financial statement extracts
Record at statement of financial position at 31 Dec under NCA Financial Assets 20X3 x , 20X4 x, 20x5 -
Record at statement of other comprehensive income at 31 Dec under Gain / (loss) Financial Assets 20X3 x, 20X4 x, 20X5 x
Initially
Record the asset at fair value = purchase price + transaction costs.
Dr Financial asset x
Cr Cash x
Fair value through profit and loss: Accounting treatment
Initially
Record the asset at fair value = purchase price.
Any transaction costs are expensed in the P&L.
Dr Financial asset x (the purchase price)
Dr P&L x (transaction costs)
Cr Cash x (the full cash paid amount)
Subsequently
Each year end re-state to fair value.
Any gains / losses recorded in the P&L.
Gain
Dr Financial asset x
Cr P&L x
Loss
Cr Financial asset x
Dr P&L x
Financial statement extracts
Record at statement of profit or loss at 31 Dec under Gain / (loss) Financial Assets 20X3 x, 20X4 (x)
Record at statement of financial position at 31 Dec under NCA Financial Assets 20X3 x , 20X4 x
Financial Liablities(equity intruments)
Fair value through profit and loss: Accounting treatment
Initially
Record the liability at fair value = issue price.
Any transaction costs are expensed in the P&L.
Dr Cash x (the issue price)
Cr Financial liability x (the full cash paid amount)
Dr P&L x (transaction costs)
Cr Cash x (transaction costs)
Subsequently
Each year end re-state to fair value.
Broadly, gains / losses recorded in the P&L*.
Gain
Dr Financial asset x
Cr P&L x
Loss
Cr Financial asset x
Dr P&L x
Amortised cost
Initially
Record the liability at fair value = net proceed (issue proceeds less transaction costs)
Subsequently
The interest element is recognised as a finance cost each year in the P&L, and the financial liability is held at its carrying amount in the SFP. Use an amortised cost table: