Notes Receivable

Measurement Initially Subsequently

Short term, interest bearing Face Face
Short term, non-interest Face Face
bearing
Long term, interest bearing Face Face
Long term, non-interest bearing Present Value Amortized cost

Present value- the sum of all future cash flows discounted using the prevailing
market rate
Amortized cost- is the amount at which notes receivable are measure initially:
a. Minus principal repayment
b. Plus or minus cumulative amortization of any difference between the initial
CA and the principal amount.
c. Minus reduction for impairment
Dishonored notes- note that is not paid and should be transferred to A/R.
Loans Receivable
Transaction cost paid by: Initially Subsequently
1. Entity- capitalized
FV+ transaction cost Amortized cost
2. Others- deduct

Impairment - shall be measured equal to the lifetime expected credit losses.

CA xxx
PV (xxx)
Impairment loss xxx