Financial Instruments Ind AS 32,109 107

very Easy 16 22m12s

Ind AS 32

t te
2 Fixedtodd 3
compountdd
1 d Fixed
gefinitions Financial
Test Instruments
Financial B Financial C Financial D Equity
Instruments Asset liability

Ind As 109
I I
Classification 2 classification 3 Classification 4 Initial measurement of
of of FA FL
Financial
Asset Finangficity

s
A Businessmodel
test Est Een Entities
as
per Fair

chmpound
transaction Financial
Transaction
e Price Instrument
od Pre Existing
12 pygmy
t t
twiter
3 Conversion
wittanstition 2 or
Transaction
cost cost Early
settlement
of CFI

5 SubseqtuentMeasurement 6 Accotinting of 7 Reclassificationof FAU FL

of FA UFL Equity
Instrument
 Egas Sea ltd

Ia Recognitionof
FA
Eg Factoring with payL
I
a De Recognitionof
Financial liab
Illus 114
I
AlEntity Substantially B Entity Substantially cEntityneither
transfers Risks Rewards Retains all transfers nor
Risks Rewards retainsRisks2
Fall Partial Rewards
De Recagn De Recogn
Not Retained
Retained control
control

thodification I I Deatitatives
10 ii Regularway 12 Impairment 13
Purchase or
A Incase of B In case of sale of
Borrower Lender FA
a
Ia d
got M'd Int 1 I
Tony
14 Embedded 15 HedgeAccounting 16 Financial Guarantee
Derivatives
 includesBank Bay
Definitions
Cash

1 Financial Asset It is asset EquityInstruments of another

any
Matis entity eg Inst in Rel CoEg shares

Contractual Right to receive

cash eg Debtors Tradere'ables
Contractual Right to receive

equity Justouements of anothed

entity beg Invest in Conn Deb
iii Contractual Right to receive
other financial asset
any
Contract to under
exchange FA FL
Potentially FAVOURABLE conditions

MÉ ewa Fa or not Eff Reference

Cash A Bank Bal FA

Trade relables FA fi
Inventory Not a FA
PPE Not a FA
Loans Advance Given FA c i
Invest in Eq shares of Infosys ltd FA
Invest in Bonds FA c i

Inst in Rel Co ConvertibleBonds Jut cash FA i

Prine Eqshares FA c Cii
Retto

Div cash
Insist in Pref shares FA e i
Prine cash
Gold contractual Right x not a FA

It
Instin GoldBonds FA c Ci
Prine

Prepaid Exp You will receives Goods seances Not a FA

not cash

Prepaid Exp Refundablein cash FA c Ci

refuseservice

Interest Retable FA e i

Bills relable FA c Li

Security Deposit Given FA owner

FA i

g a
Tenant

in the end of
Rent agreement

Trade retable Cask Bills Retable Fa c Ciii

this FA is going to
give
another FA apartfrom cash Eqshares of
anotherentity

Income Tax Refund statutory Right

Notin Scope of F I

Inst in subs Fx Asse Not in scope

Ind AS 110 111.283
 Contractual obligation to
Definition of Financial Ciab It is
any
lab deliver cash eg creditors
that is Tradepayab

Contractual obligation to
F20 Derivatives
Kishan Ajay deliver any other F A
Bet
ga c E
Rel Share T Rel share I Contractual obligation to exch

10,000 FA lie under potentially

After 3 months coins
h
unfavourable conditions

Kishan Favourable FA Contract to issue own EqSha

1st mouth Price 9 s

Ajay unfavourable te in variableNumbers

g my
Examples
Def Ref
Particulars Flag
Trade Payables FL a i

Loan taken Fe a Ci

outstanding salary FL ali

Advance Income In future deliver service Notate

not cash

Ad refundable
Advance Income contract cancelled to students FL a c

Int cash
FL CD
Debentures Issued a
Prine cash

Issues own
eq shares FX Equity

Convertible Deb Issued Tux Ignore

Prine Eqshares our Equity
 Convertible PrefShares s Div Ignore
Prine Eqshares our Equity

Di's cash
PretShares Issued
Princecash F a i

Tradefayable com YiiuskYame

giving a FA
to my FL
FA FL ait

Income Tax Payable statutory obligations not in scope

of F I

Provision for Bad debts not a Fl

CIndAS 37

Fl a i
Security Deposit accepted

Quin Eg shares deliver Equity

off
 Compound Financial Instrument
Single Justowment ret Equity

É Debenture
te
v

Redeemable Convertible Compulsory

e
p e s
JutPayment
He
Prine Payment
He
TutPayment Prine Payment
He
Cash Cash Cash Own Eq Shares
He
Felt

Tix
Ee
smpaundgnani.at
astaamem

Pret shares
u Ie
Redeemable Convertible Compulsory

c
Dividend
Prine Dividend
cash Craaudatory
11
PTI
Discretionary Mandatory a Ouen Eg
Assume Cash shares
obligation If nothing
we will distribute mentioned FL

only if co
profits
I
earns
cash
cart
Notate
 same logic for prefshare
Is Debenture convertible

Conversion at the option of Conversion Cat the option of the

the holder issues

e
Fat Prine Prine
Fat
He
Issues at its own mill cannot H Issues at its own
avoid paying cash cash
YI Ye
p
FC
wid CAN AVOID
paying
Hs
cash

Equity
TE
TE

dat car
Redematiepeb
pain c tu
are y

J
Prefshay Convertible comp Ger

But Fe
Deb Convertible Holder FC CFI X
prine

Ht A

year
deb Cam Issued
prior
 Investor dust i oyconnbbofRel.co ltd
Iyer
nor
Ajay e

Jut
Cast Read Ethan's of Rel Co
H H

C D c Iii

TImpound
financialgust Only applicable from the point
of view of issued

For Holder there is No concept of CFI Holder Only

FA

Fixedto fixedTest
Come Deb
EI Issued Compulsory

Jut Princip

cash Own Equity shares

it provided it meets Equity
fixedto fixed Test
also refer table
Egskates
qq.gg
Mo of Deb to be No of equity shares to be
converted issued
Fixed fixed
Day Day
eg 500 Deb
eq shares
s sooo
eg
 9

If FLF Test is not met then Prine will be Fin liab

tote If is mentioned always assume FLF Test will be met

nothing

Def of Equity
2 conditions Both should be met
c
s
Co will issue AND FLF test is
an equityshares met
 classificationatheasurement
IndasioasFI

D classification

e a

Financial Financial Equity

Asset yay

Classification of FA

Acid
Camostised
Futon FY TPL
Fair value Fair value
costpnamed through other through profita
comprehensive loss
Income

i Cin

d
Entity specific test
Business model test Hold or trade Entity as a whole
Trade

met
CCCFCTest
Goutraitualfashfowaharacteristics Test not met
FA FA
It pfincip e s
Jut t Princip captain loss Instrument
Intentithanames specific
2
cash flows
Tentmet Test
Then Cafe met
 ABIest

Fiona in
sh
input Infor
in TURel car
SF D CCFC

t r
Eg Inst in Debentures case carcanet
nointention Print
ofselling

AN
case r CFC Not
thinkingof met
sale captain ussr

Jut X
Eg Imistin zero coupon Bonds care
mine or met
signee Prine dat

19 o

It
Eg Imistin Eq shares Cee
Din r
Z
not
I Prine s Recoveryonly on met
In case ofeq shares sale
I captain loss
CCFC Never Met

Fu for cafe test If intention is to earn only promised cashflows on FA

then CCFC met

promised

is
eg Inestin
Debt
cashflows
Petsamo
INCE
 Businessmodel
I
t t t
Hold Hold 00 Trade trade
CFC Ice core Corot
He
read
c e
FITAL
met not inet not
u met Print Iat My
ACM
Camoatised th FY'Toce R
fancy
cost
method

Alternatively irrevocable option

to use Futa CI CHR

I mainlygivenfor Inst in Egshares

where by default ecte is never met

Classification of financial liab

He
only Hern Exceptin by Indas for FL
fygqpgiven
Derivatives Financial Guarantee Discussed lated
ego
 Initial Measurement of FA a Fl

Acn method
Ak Itd Borrows
1ot.p.a.for5yrs
from Dena Bank
lender FA
H
2700caoaes

Borrower FL

Borrowed Fe
ar 0 I 2 3 4 5 Total Jat Exp
inflow
100W lo lo 10 10 lo 50
100

Total inflow 100

Total outflow 150

Jut Exp 50

Alternate way of giving loan shouted

Granger
Facevalue

Ak Id Borrows from Dena Bank 100 or 81 coupongut

Issued lot discount

B.to iCe.D
480 I 2 3 9 5 Total Exp
inflow
90 8 o o o o 50
1007
Total inflow 90
Total outflow 140
total Met Exp
51
 on theface of it s Tat seems to be 87 couponTat
off
Butinsubstance Interest

Indigested
As
per AS
Borrowed AKI

Day EIBAR Da 900 s aloft

Disc on IssueAppa d
TO loan FL Ale 100 nothing but
as discount is

Juterest which should be

4rad Jut Exp All Do 8 Jut Booked owed the period of
TO CIB J coupon
loan

Ind As accounting FA FL

Day Fair value

Acra ragweed ur end measure Amoorfised Cost

what is Fair value

C

where transaction is at where transaction is at normal

off rakt teams

He
teams ie Apartfrom cases
given in offHe that
Where there is Pre existing teams
any
relation Between Boraowed tended
MetCash
Day inflow
OR Assume Fair Value oath
It is a Compound FinancialInstrument i e Fair value Transaction Price
 If fair value is Based on level I
input

Fair value of future cashflows

Present value

discounted inaorketRateof Interest Elk

steps to solve
step Cash flows

Step Fair value of FA FL

top
Effective InterestRate EIR Combo of couponTut H Disc Prem
He
Either given directly or find EIR using interpolation

Steph loan Amoatisation Table CAT

step Cashflows Fl Borrowed

Cash flow 100less lot disc

Y 90 inflow

1 5 8 outflow coupon Tut

pa
styrene 100 outlaw Princip

Step Fair value of F L exist'srelation

Neither any pre
Fair value Transaction Price Assume why Nor CTI
Day inflow outflow MOR Level I input

Fair value 90 crores

Step EIR compute
Fairlane pv of future fashflows Eek
CIOcash
flow

90 crores PY of FCF EIR Get

Cased Assume x 97

arend FCF D F 97 Pu 8xAFof5yis 97 C'T

I 8 1004 D F of 97
0.917 shy
2 8 0.892 8 38947
a one iooxo.no
3 4

8 0.708 96.12
y
S 8 0.650
100
He 96 12approx
Annuity
factor

CasedAssume D 111
8xAFof5yrs cit.t
1004 D F of 5Myr 111
8 3 7047 100 0.593

8891 approx

By using interpolation
9 96.124 90 x
11 91
96.124 ggg
97 6.12 X 2
7.2

97 0.898 21
 9 1.707
10.701 approx
Eff
couponTut Prine
Booking thisTut
Steph loan Amortization Table
ur fair 8in Falta gut Eit Repayment
cittmotised
cost

I 90 9.63 8 91 63
2 91 63 9.80 68 93.43
3 10 8 95.43
93 43
95 93 10.21 8 97.64
y
5 97 64 6.44 o
0.091APPLY 100

so Total Jut
Booked

Journal Entries
CIB Alc Da 90
Dad
TO FL 90
Fair Value

Uriend Jut EISAI Da 9.63

TO Fin liab 9.63

Fin liab 8
Urlend
TO CAB 8

Baloffe Curlend 91.63 Armedtised Cost

O
 CF

Eg ng
step cashHours FA
cat
ur Cashflows 50k lot Prem
0 55000 outflow
1 3 5000 inflow coupon off total outflow soooo
pa
3rdyrend 57500 inflow Prine totalinflow
50kt 151 Prem
Net income
7,27g
GutIne

Step FY of FA
Fair value Transaction Price

Fair Value 55000

Step EIR
FY PU of FCF EIR
Day
cash flow

55000 Pv of Fcf set

JC IN
5000 X AF of 3yn 117

57500 X D F of3rdyr lit

59262 approx

De lot

5000 X AF ofByn lot

4757500 x DFof 3rdyr lot

55635 approx
 By using interpolation
10 6 on
55541 3
10.467 approx EIR

Steph eat loan Amortization Table FA

Fairlane Income Receive

u apps Jut EUR110.961 Repayment Ccs

I 55000 5753 5000 55753

2 55753 5832 5000 56885
65000
3 56585 5919
a
Apprg 57500

Toopprox
TotalFatIncome

FA
EE
FA CInnist Alc Da 55000
Dayd
TO CAB 55000

arena cameras asana cursed sass

TO Tat Ine 5753

Urlend CIB Aleph 5000

TO FA 5000
 Finciab DebIssued
Eg3Py
OE
step cashflows Day Fu T P
48 CF cost net CIB
air tote
O goooo CinHow7 5000outhow gok

5C80007p.a 8s0pqetrjjos 1louthow coupon Ah 5000

sthyrend 1.00.000 outflow Prine toy 5000

off Total inflow 90000 gtfo

Total outflow 145000
6000 40000
109L 0

Net outflow 55000 Ca Bal

Ep Uab
7 Dise TrEst DirectExp Capitalize Day
coupon
sooo
Tr Cost Jut 101000 D's Bal in lab less
goooo from
liab

Asset Da Bal

DirectExpCtrCost Capitalize Day

in
E Bal Asset Adff

Step Fair value of fl

FY of Fez Tr Price Gtr Cost
90000 EI 5000

85000

Step EI
Fil Cray PV of FCF EIR
85000 PV of ECF act
I
FY
feer
of
adj
Ts Cost

2 101
8000 x AF ofSars lot
µ
Ct ILY D F of St yr lot
92418

2 127
8000 x AF ofSars 121
G ILY D F of St yr 121
85581

2 137
8000 x AF of Suns 137
t IL X D F of 5th yr 131
82414

By using interpolation
121 85581 A x 131 12 3
82494
85581 1

12.181 approx EIR

Steph UI FL Fairlane Exp pay
ur Opn Jut 12.181 Repayment Cls

85000 10353 8000 87353

I

2
3
y
5
55000

EE
Day CIB Alc Do 9012
TO Fl 9011 Net FL 85000

Day Tr cost te se
Todo se

usted JutExp 10353

TOTE 10353

8
artend FL
Tock 8000
If in above example we solve from FApoint of view Assuming tr cost of 2500
was incurred by the invester as well

step cash flows FA

Ur CF M
IIFA 90000
0 90000 outflow t 5000 outlaw to UB 90000
I
invest I cost
IIFA 5000
5000
my FY of FA TOCCB
Fu Tr Price Tr Cost
90000 5000 ftp 00

95000

II summary for transaction cost

For'Fe
Fo FA
cost
Deduce Tr Add Tr Cost to
from Day FL Day FA

i e F of FL Tr Price C I Tt Cost i e FYof FA Tr Price Tr Cost

OFI what is Elk Coupon Tut

Disc Elk
s
Prem
Tr Cost

If there is No Disc No Prem Nott cost then Coupon Tut EIR

Illust 39 A Hd F.c

Step cash flow re

Ur C F 1
g
108887158 9500 Cretinflow

1 5 100 p.a outflow coupon

sthyrend 10000 outflow prine

Step Fair Value of Fin liab

Fil of Fl Tr Price E Tr Cost
100006 1 500
9500

Step EI
FI PV of FCF EIR
9100 PV ofFCF Xt

2 1 IT
1000 X AF of 5 yrs 117
t 10,000X DF of 5My lit

96300

2 121
of Sars 121

fit
t 10,0004DF of 5Mur 121
 By using interpolation 11 9630 9500 X 12
11 3
9630 f 927g
11.577approx

Steph cat
urended
Cedayfairname
gÉÉÉt Repayment cis

3103 2 q 1080 1000 as.ro

9580 1089 1000 9669
31 03 3
Y 9669 1099 1000 9768
45 9768 1111 1000 9879
46 9879 1123 1000
2 110000
Apparg

5500

Er.cat

Extra Part Journal Entry

Of 041 1 CIB Alc Do 10000

TO FL loan 10000

Tr
Cost FLAC Da 500
TOUB 500

3131 2 JutExp 1080

M q 1080

3131 2 FL ACDA 1000

TOCK 1000
 WR AHA FL
Illust

step Cashflows FL
ar Cashflows
o
ioaoointiowesooIittitw.aso 1 Theeays
2 Jut flow table prepare whenever
coupon Ct1PmjneJCas.h
half WMD
princip is paid in Installments
guttery
yearly

pffuteoupon Face value

wtf casnflowstable coupon

Afr Ended Face value Iut 12t.p.a Repay Cb

u
Épergey Prine Jut
30.06 X1 95 16,000 300 13007 10.000

30.09 x1 10000 300 2500 300 7500

31 12 1 7500 225 225 7500

31 03 2 7500 125007 1225 5000

225
30 06 2 5000 150 150 5000

30.09 X2 5000 150 2500 150 2500

3112 x2 2500 75 475 2500

3103 3 2500 75 2500 75

step Fair value of Fl

FY of Fe Tr Price Cl TrCost
10000 47500
9500
step EIR Given
16 607 i.e 9.15 perger
p.a

Step LAT Annually try

step
Fair aero
W
Qtr Ended Opn Iut EiRfa.ist.p.g Repayment as
30.06 x1 9500 394 300 9594

30.09 1 9594 398 2800 7192

31 12 1
31 03 2
30 06 x2
30.09 X2
31.12 x2

3103 3

JE Extra
OFI
0109 1 CAB ALC Ds 10000
TO Fl 10000

01.04.41 Fl 500 Tr Cost

TOCK go

Off
30.06.41 Jut Exp Alc 394 step are a step 4 CAT
Diff
tote 394
op
guy
He
f
Opr
face
coupon EIR
Fayne
o OG XI FL Alc DS 300
pigaredanyunen
Tock 300
PrinpaidinJust
 Acta Method
Pre existing Between Borrowed
Raion lender
u

Fair value Transaction Price

o s Given

Fair value Pil of futurecashflows EIR rantRate

Example FA Fl
Ale ltd granted a loan to its employeefinds than of F10.00.000 5t.p.a
Repayable after Syrs i e Princip is repaid after 54ns Interest is charged9pm
annually Madket rate of similar loan is not p a
show Alding treatment in the Books of Akita

Akita Mom
employer employee

Relationship

SOI AKHd.FI

Step Cash flows EA

Ur Cr F
g 16.00.000 outflow
1 5 soooo a inflow coupon
p
5th end 10,001000 inflow prine
yr
 Step Fair value of FA FY P of FCF Elk Relationship
Mkt Rateof gut
lot
50K x AF of Syrs lot
101 XD F of 5th yr lot EE Day Akita
FEW
189539 Ct 620921 loan to EmpCFA Ale Da 81046
T 189540
810460 approx Prepaid EBEAK DQ
TO CIB All 10,00 000
cutoff

Difference Between tht

Fair value Transaction Price
artery pie 37908
10,0010001 1 810460 TOPrepaid E BE 37908
189540 18954015yd
Prepaid EBE cutoff over
the period of loan

step Elk not Given

H
Mkt Tat Rate

Receive
Income
step CAI CFA
ur Opr Mitral If Eir Repayment as
810960 81046 50000 841506
2 841506
3

9
5 50000
1000000
 É
Day Loan to Emp CFA AK Da 810460

Prepaid EBE All Do 189540 aloft over period of loan Syr

TO CIB 10 00,000

Yr lend FA 81046
TO Tut Inc 81046

Yr lend CIB Ale Da 50000

TO FA 50000

Yrlend Pie Ale De 37908

TO Prepaid E BE 37908
189540
sus

steps to solve In case of Pre existingRelation

Summary
step CF
PVof FCF
Step Fu of FA FL compute Eir
step EX Diff Btw Tr Price a Fx

Step EIR Cinkt Jut rate Given

step LAT
 Illus 33 UDR

off Sec Dep Jut free

Daylesseegivestolessor
tenant Owner
I after the lease ends Esso Rent
lessee lessor refunds the soebeploep.ca
deposit to lessee
752 Dep 9 Lp a

Kelatiousewp

cash flows CFA Altd

step a

Ur CF
o
fol outflow
1 5 coupon of gutfree
Shyrend lol inflow Prine

Relationship lessee 4 lesson fu protect Eir

step FairnaweoffA
IO XD F of5thyr 127
10 ex O 5567427
5 67,427

step Diff Btw Ta Price Fair value

10,001000C 567427
432573 Prepaid lease Rent s
aloft over the periodof lease
Sars
 step EIRE 121

receive
eat FA
Steps g
oprtair ÉÉ
trended Iat Ray us

31 03 X2 567927 68091 635518

3103 X3 635518 76262 711780

XU 711780 85414 797194

45 797194 95663 892857
6 892857 10100,000
107143

M
151,1 secoepCFA 567427
aloft over 54ns CIndas116 leases
PrepaidleaseRent 432573
Ron
Ytiset Tock 10.00.000
Igge
3103 2 FA Ale Do 68091

To Jut Ine 68091

31 03 2 Repay Ma

31.03 2 Pll Ale Da 86575

To Prepaid L R Arc 86575
432573
54
 last YearJ E Hint Look at CAT andpassJ E

31 03 6 FA All Do 107143
Jut In 107143

310346 C 1B Al Dd 10.00.000
TO FA Are 10100,000

31 3 6 Pll Ale Da 86575 Dont forget this

TO Prepaid c r.ae 86g
432573
54
 Illus 116 CAR Relationship Parent Subsidiary

Cash flows 21781TFA

Step
Ur cash flows
g 10.00.00.000 outflow
1 5 0 2700 immaterial Ignore

sthyrend 10,0600,000 inflow Prine

of FA FY FP Fu PvofFCF
E1R 1ocrxD.F
Step Fair value Relationship
of star my
10 cry 0 56743
5,67 43,000

Diff Btw Tr Price Fair value OFI J E

step

41
10.00 001000415.67 43.000

4,32 57,000 Day

FA Inst in Prefshares 5,6743,000
Inst in Subs Imistin Subs Dd
4,3257,000
TO UB 10,0000,000

Step EIR 121 Given helps

Parent subs
Ind As
Eps
step cat FA Income Receive trend
Jut ECR 121 Repayment 120Nothing
rend Opr Fairvalue as

31 03 X2 5.67 43,000 6809160 6,3552160

X3

46 10100,00000
EE 211 Parent
01 09 41 FA Inst in Pret shares g 67,4130
Inst in Subs 4.32.57.000 Indas110 hrend Do Nothing
TO CCB 10,0000,000

31 03 72 FA Alc Da 6809160

TO Tat Ine 6809160

31 3 73 FA Alc Da
TO Tat Ine

3131 4 FA Alc Dd
To Tat Ine

3131 5 FA Ak Dd

To Tat Ine

3131 6 FA Ak Dd

To Tat Ine

31 3 46 CAB All 10,0000,000

TO FA 10,0000,000
 Illus 122 LDR Relationship Employer Employee Deckard
Point of view co employer na

Step Ct CFA
CF
Y Iac outflow

15 PrineRepayin5installJaed

Cftable com 9Mmgt

Cashflowstable
rend Face value Jut qup.n p.in any
20 1 16.00.000 80000 320000 80000 1280000

X2 1280000 64000 320000 64000 960000

43 960000 48000 320000 48000 640000

44 640000 32000 320000 32000 320000

5 16000 320000 16000
320000

Fu of FA Relationship FY FP
step
PyofFCF EeRC10t
4rFC.F
Fy
WM DF lot PY
20 1 900000 3.21 8012
42 384000 3 22 644

73 368000
Yy 352000
45 336000

14.06.272 approx
 Step Diff Btw Tr Price Fair Value
T 1600,000471406,272
193728
prepaid EBE aloft over period of loan i.e Sgm

Step4 EIR 107

fereine
Steps cat FA fairlawn Income
E112C10t.l Repay'met cis
Trend Open Iut
3112 20 1 1406272 140627 400000 1146899
1146899 114690 3814000 877589
3 877589 87759 368000 597348
44 597348 59735 352000 305683

x5 305083 30508 336000

409
apprady

JE In the Books of Yitd

011011 1 FA loanto Earp Ale Da 1406272 Ind As109

Prepaid EBE All Da 193728 aloftover periodof loan i e Sgs Ing

TO CIB All 16,09000

31 121 1 FA Alc Da 140627

To Tut Income 140627

31 121 1 Da 400000
ClBqMAK
400000

31 121 1 PIC Ale Da 19372815yd

Z
38796
TO
Prepare 38746
Notes Only art entries were asked
 Extra Part
If exam sometimes ur lend ie 31 12 41 Bls extract Pll Extract may beaske

FA
cure for Bifurcation of Curran on Current Not a
ur lend EA 1146899 were for Prepaid EBE
a ur apn aloft as
Current NohCurrent
193728 738746 154982
877589 as 482 as Bal 116236
269310 2 154982 138746
Diff Btw Yrlend a argeynd
Cls
1146899 El 877589 current Mn Current
38746 116236

Bls Extract 3112 1 Gurley e urged

IJASSII
Pie forthe Yrended311121 1
Net
Fin Asset loan to Earp 877589

Prepaid E BE 116236 OtherIncome

other
Jut Income 140627

Fin Assets loan toEarp 269310

IEEE 38746
Prepaid EBE
38746
Other CA

Bifugcation of loan Between current Non Current

Done in ICAI som each year even princip is getting
only when repaid
If only coupon was getting repaid then whole loan is shown in
non current s As ICAI som
per
 Question 4 LUR
Ct CFA
stepI
ar
o 15 outflow
1 5 an

WHO CF Table Repayment

ur apnCFacevalue Jut Prine
Tut Cls
31 03 2 15,001000 90000 300000 90000 1200000

3 1200,000 72000 300000 72000 900000

XY 9 00,000 54000 3000007 54000 600000

6,001000 1300000 36000 300000
45 36000
X6 3,001000 18000 300000 goooo

StepI Fair value of FA EIR

40 CF DF lot PX
3103 2 390000
3 372000
Xy 354000
45 336000

Xo 318000
1354602

DiffBtwt.P KEY
Step
145398 Prepaid EBE Cutoff over period of loan ice Sans

step EIR not

 gnome Receive
step LAT FA
Intthot
Opr Fairlawn
ur ended Repayment Cls
1354602 135460 390000 11.00.062
313 X2
3 1100062 110006 1372000 838068
XU Jay
45
XG

JE Extra

old FA loan to
amp
1354602
145398
Prepaid EBE
TO CIB 15,001000

3110311 FA 135460
TO Int Ine 135460

3110312 CIB 390000

top 390000

311312 PIC 29080

TO Prepaid Ep 29080
145398
54
Note The treatment done by accountant is incorrect as the loan

will be recorded Fair value i e 1354602 2 not at face value

of 1500000

Int Income in Pll will be Booked EIR on Fair value i e 135460

 Bls Extract 31 03 X2 PIL Extract 3103 2

I Assets OtherIncome
Iat Income 135460

Ifn asset
loan to Emp 838068
Exp
ther NCA EBE 29080
Prepaid E BE 87238

a
Fin Asset
loan to Emp 261994

other CA
29080
Prepaid EBE
loan
1100062
and Prepaid E BE A CB1f
ur
Opr w off ca
Ey
195398 129080 116318 261994 838062
2 129080 87238 1100062
116318
f 838062
3
y
5

off Irrespective of whethed employee is required to stay in seavice

or Not Prepaid EBE will be w off owed the period of loan
 Summary of Types of Relationships their Alding treatment

No Quesfrom lessonspointof view

Lessee a lesson SecDeposit

CIA City
JE lessee lesson
FA Ale Da CIB Ale De

Prepaid Lease RentAll Da to FL CsecDep

TO CIB To Advance lease Rent Africame

u
Ind Is 1169 cutoffones the
Tans 116s cutoffones the
periodof SecDeposit
periodof SecDeposit
parent to subs
p loan given by
Parent helps Subsidiary
Ha cites

SE Parent Subsidiary
FA Ale Da CIB Ale Da
Inst inSubsAK Dd to Fl
TO CIB to Cap Couthfrom Parent

In'das 110 trend DoNothing EndAs 110 4rad Do Nothing

Subsidiary helps Parent

loan
given by subs to parent
CFA ED
Subs Parent
IE
FA Ale Da CIB Ale Da
Dix Dist Ale Dd TO Fl Ale
TO UB TO Div Income
u u

Day deduct fromReserves lie OtherEg Day Tot to pal

Appropriation of profits
 I
Never asked
p in exam
helps
Employer Employee
cha Cte

IE
FA loan toEarp Alc Da C113 Ale Da

Prepaid E BE All DA TO Fl
TO UB to Adv Salary Click
v e

cutoff over periodof loan aloft over periodof loan

Ci e Ind as 19 Ci e Ind AS19

froyo.nlgfew
rigged
Gout helps co

granted byGant to the lo less than Mkt Int Rate

loan

Ea Cee

EE CIB Ale Da
TO FL Ale
To GoutGrant All
c

Ind AS20 Treatment will be as

per Ind AS 20
Discussion
for this will bedone in Ind As207

parent helps Sub

n
MTBF Defina
F
u

au
for
Cap foot

lessee Ei lessor Sub 5 Parran

FA Fc Cta FL
6 pa HB
FA
DiDist
Tiamat a toe Itai
one

hers

CCB
to Fe
To Gone Grant
 Illus 36 WR x2 ABC

Relationship Parent helps subs

cased loan Repayable on Demand

Relation Fu Pu of FCF ETR
FCF Not available
n u
Tenure
n u
ECR

Fu TP As no other option left

JE XYZ CParent SFA ABC subs FL

Day FA Cloanto At a 10h CIB lol

Subs
to Fe loanfrom 10L
TO CIB Ale lol Parent
No Diff will come as we assume FY tip

Case 2 Loan Bys Elk lot coupon of Jutfree loan

step cash flows

ur CF
10L

1 3 0 coupon of
3rdur toe Repay Prine

Step Fu of FA FL FY PYof FCF EIR

10CX D F of 3rd yr lot

757315
 Step Diff Btw Tr Price GF x 2 Parent Insist insabs
10109000 C 7757315 24862g
ABC subs capcontr from Parent

EIR lot
Step

Step cat
ur Opn Fairlane Jut Éiii Repayment as
I 826447
751315 75132
2
826947 82695
I 909092

3 909092 90901 1
1 approxadj

EE Xyz Parent ABC Subs

C113 All 10.00.000
Dad FA Ale Da 757315 Dayd
Innestin SubsAleDa 248685 TO Fl Ale 751315
TOMB 1900,000 to capContn 248685
Iffy BIO E
rien Fatale Da urlend Jut Exp
To Jut Ine to Fl

ar2end FA All Da arsed Jeet Exp

To Jut Ine to Fl

FA All Da
rzend yrzend Jut Exp
To Jut Ine to Fl

CIB
rzyd t WEED FL IOC
TO pp TOCCB
 case Refer Ques Bank

In Consolidated Financial Statements loan treatment

He

Inter Co transaction loan gets eliminated

Ques 8 CUR
Almost same as illus 36

Case same as illus 36 solvedabove

same as illus 36
as Finder 7,31g
GivenFX 810150 if Fu isgives USE It s ICAI wife alwaysdigat

CAT asked only for 1Year

ar Opr lot Ces
810150
REY 891165
81015
lyfe LAT of34ns wont match as Fair value of 751315 was Not taken

I
Kk Parent FA ne subs FL
810150 All Do 10.00.000
Sayf FA Alc Da Day 113

Inestin Subs Do 189850 TO Fl 810150

TOCAB 10.00.000 to capcouth 189850

Erlend FA 81015 artend Jut Exp 81015

Fat In 81015 TO TL 81015
 Case 3 same as illus 36

CFS Same as illus 36

ÉÉiere helps
sans parent Fe
4K FA CKK
He

Subsidiary will treat Parent will treat the

the Diff on Day as Diff on Day as
Div Distr Div Income

É IA Da CIB
Dist DivDa TO Fl

TOCCB TO Div Inc

 tenet input
what if fairvalue is Based on level I input
Ind AS 113
u

FY I T P

Compute Fu Pu of FCF EIR

Diff Btw TP FV
tr't to par irrespective of
any relation btw 2 parties

Ce
Etihad step
Step Fu compute
Fy PVOfFCt

qp StepODiffBtwT.P
a Fu pac

step EIR Caven

step cat

Illus 29 lessee FA SecDep

Step Cash flows CFA

Ur CF
0 Goooo outflow
1 3 of coupon
3rdyrend 10000 inflow

Fair value of F A Fy protect Eh

Step
10000 XD F of3rdyr 71
8163
 Step Diff Btw F PH F
10000 8163

1837

c s

Scenario 1 FY is Based on Scenario 2 Fu Not Based on level 1

level I input input Relation lesson lessee

Diff lessee
Diff trt to Pal He

Prepaid lease Rent Rouasset

71
Steph EIR

Stepsent CFA m
ur Opr Jut7 Repay ces

ZEE
i go
2
10000
3

J E Scenario 1 Scenario 2

Say FACSeeDep Alcoa 8163 Day FA SecDep Ale Da 8163

PIL Ale Da 1837 Prepaid leaseRental 1837
TO CIB 10000 aloft34M 10000
over To Clb
Ques12 CPR FA MAY
F level I input Ev spy of FCF EIR

CF
step
ur C F
o 1204outflow
1 5
Lpa inflow coupon
12

5thyrend 120 inflow prine

based on level I input
compute FY as it is
Step FY of FA FY Pu of FCF EIR
1214 AF of Gym 121
47120L X D F ofSth 127
yr
111 35lakhs
approx

Step Diff Btw Fy UT P

120 E 111.35
8 65 Trf to Pac FA Ale Da 111 35
IE
PILAR Da 650
8
TO C113 120

Step EIR 121

Step cat Hw
 Compound Financial Instruments Flt Equity Entyfrom issues point

Eg4 Pg33.19
CASE A Option to convert with holder
Quessolving meitd saved 44 Jut as it issuedthe
for Deb with conversionoption intoequity
Issued It 101 Deb Conn

fat Pincipfortidder savingsin Tut

g Fe int 101

Tiamponent
step Cashflows Fc
Ur Cash flows
0 252 inflow
1 5 C2 5up a outflow coupon
sthy 252 outlaw prine
compute Fu as this is CFI
Step Fair value of FL Fu Puof FCF ER

2 52 AF of Sars 141
in
251 X DF of 5th yr 141
2156692

Step Diff Btw T PUF V

25100,0005121 56,692
343308 Bls OtherEquity
Equity component
an end s Do nothing
Steph ER 141

Step CAT Finliab we

arend Jut Eir at Repayment as
Opr
I 2156692 301937 1250000 2208629
2

9
5 2412281 337719 250000 2500,000
Before
repayment
to holder

JE
CFinCiab Day
ClBAlCDd25i00.00 TOFinliabClot.Deb
Indas109
2156692
lot Deb 343308 NofurtherAlling on Arend
To Eq Comp

Uriend Jut Exp ACDA 301937

TO FL All 301937

Ur lend Fl Alc Do 250000

TO CIB 250000
 BIS Extracts an send BeforeHolder Exercises Any option

Asset
Egad
Ether
Eq EgCamp 343308

ÉIciab Clot Deb 25,001000

Case HolderExercises cash option case Holder exercises equity option

FC Ale Da 252 Fl Alc Dl 25

TOUB 252 To Equity Comp 252
Egcomp Bal 343308 25
343308 2843308
Eq CampCOE Are
to Ret Earnings OE 393308
Eqcamp Ale Da 2843308
TO ESC Facevalue XX
to SeePrem Blf XX

ORG
FL Ale Da 252

EqCampAleDa 343308
TO ESC XX

TO Sec Prem xx
 CASEB Option is with Issued
Eg 4

Off lotDeb

6
Jat Prine Issuer Saving

Etf
ingot

step Cashflows Fe finandatory Cashflow

c t
Y 252 inflow
1s 2.51 p a Couthow coupon

5Myrend 252 0 payment avoidable issued's option

FY of FL
step PMof FCF EIR
4141
2 52 X AF of 5yd 191
858270

Step DiffBtwTPaF.v Eg Comp

25 00,00041 858270
1641730

Step4 EIR 147

 step LAT CFC
Yr Op Jut 141 Repayment as

I 858270 120158 250000 728428

2 728428 101980 250000 580908
3 580908 81257 250000 411665
4 411665 57633 250000 279298

5 219298 30702 1250000 o

zero coz prine was treated as equity

IE
Day CIB Alc Do 25.00.000
TO Fl 858270
TOEq 1641730

Vlad Int Exp All Do 120158

TOIL 120158

artend FL AC 250000
TOUB 250000

Bls Extra arsenate Before issued exercises option

Asset
Eghtab
Ef
OtherEq Eg Comp 1641730

life o
 Option Issues pays cash 251 Option 2 Issues gives Eg Shares

Eq Comp ALDS 1691730 Eg Camp Ale Da 1641730

Retained EarningsAlcoa 858270 TOESC Facevalue

TOCIB 25100,000 TOSec Prem Blf

Illus 126

ME Option to convert is missing Always assume that option is with the holder
Connloan

step a re
Trine Savings
CF Jut
Y
added
600000 inflow ie y Iq
14 48000Pa outflow coupon

4Myrandf6o00007oathewprinc Step

FvofF.L PVof Fa É
561962 approx

step Eg Diff
38038

Step Elka lot

 cat re
Step
ur ended Jut pay Repay as
561962

I
In 1st Jut charged to Pll should be 56196 not 48000
yr
Co has charged 48000 as fin cost in Pll They need to charge extra 8196appron
He
56196
48000
EE
0104 1 CIB Ale Da 600000

TO FL 561962
TOEq 38038

BIS Extract as on 3103 2

ÉECeq 38038
comp
Asper ICAI when no prine repaid
tidy every year then full loan Non Current
Finciab 81 ContDeb 570158 as an 1st yr end

Ques 13 s Hw
 Compound financial Instruments with transaction costs

Egs 81 Come Deb Optionto convert Holder

I Princip
Holder Savingsin Tat

ie F9uity

Ca

Cash flows Fe
Step
ar CF
0
80000 inflow
1 3 outflow coupon
6900 a
p
3rdyrend 180000 outflow Prince

step Fair Value of Fin liabCPvofFCF EIR 12t.J

6400 x AF of 34ns 121

4780000 X D F of3Myr 121

72314

Step Diff Btw T.PE Fy Equity component

80000 72314
76860

EIR 121 Mkt Tat Rate BeforeTrCost

Step
 Allocate Tr Cost to Fl Fg Caooox7231480000
step
Fe 72314 1808 Deduct from FL on
Day
go

159 7686 192 Deduct from Egon Day Eg Ca Ba

2000 7686 80000 Test
i less

Revised Fu of FL after TC 72314 671808 70506

Revised value of Eg afterTC 76864 192 7494

Step6 CAT Fl
FI If.Eost
an Opr ht 1 Repayment CG
I agog 8461 go 72567
2 72567 8708 6900 74875
f
3 74857 8985 6400
77460810000

th Because in Mkt Jut

Step New EIR Tr cost impact is not there
way rate of pay

Fil Pv of FCF ER
is
It
780A

70506

Assume oc 147

6400X_AFof3yns 6400 X AF of 3 yn 121

14 H80000XD.F
3M 121 780000 XD Fof3rdyr 121
of yr
g g 72314
 121.47723144 70506 14 127
Interpolation x
72314 t 68858
13 051 approx New Elk including Tr Cost

Step 7 LAT Fe new EIR

r Opn Jut 13 051 Repayment cos
I y 9201 6400 73307
2 73307 9567 6400 76474
3 76474 9980 6400 80000
8
approgy Before holder
exercises
cash eq optio

JI BIS Extract Day 1

Dayd CIB Ale Da 80000

to Fl

TOFg
72314 Effy
7686 Eg
TrCost
otherEq Eg Comp
FLAC Da 1808 7686 192 7494
Day
Ey Alps 192 lick
TO CIB All 2000 Fe 72314 1808 70506

I
Fell after
to Cost
 CFI without tr Cost CFI with Tr Cost
Summary Summary

step of step Ct
Step Fyotte HOFFER step Fuof FL older
step Diff Eg Step Diff leg
step FIR step OldECR
step cat stop Allocate T C Teg
Step NewEcrCaftert.c
Step CATCH Newer
 IMI'd
Oru Pretshares any
Ce Crnandatory I
Stp c f Jok Fc outflow gutloix Prine

if
1500,000 inflow I É
1 5 150000 outflow coupon

Smyrend 15,00000 ID
old EIR 157
step Fuof FL
150000 X AFof syn 151
502823

step Diff Btw T.PE F v Eg Comp

15,001000 C I 502823
997177

Step Old EIRE 157

Steps Allocation of Tr lost Between FLU Eg

FL s 10056 30000 502823 1506.000

30000
30000 997177
Eg 19944 1500,000

Revised F Y of FL after F c 5028234 10056 492767

n n
u
Eg m 9971774 19944 977233

Step new Eir Given 15.867 Given

latter the effectof T C
 will makemistake
here
step Ut Fc faigyfff.fi pay
r
opn It É Repayment cos
31.03 2 492767 78153 150000 420920

V3 420920 66758 150000 337678

XY 337678 53556 150000 241223

X5 241223 38260 150000 129493

46 129493 20538 150000 o
3
APPLY

Journal entries
Or 041 1 CIB All Do 15100,000
TO FL GOT CCCPS 502823
9 CompCloy cops
combined J E

Y
r cost

alou Xl FL Ale Da 10054

Eq Alc Do 19944
TO CIB 30000

31 31 2 Diy Exp All De 78153

TO Fe 78153

31 31 2 FL 150000
TO CIB 150000
 31 31 3 Diy Exp All De 66758
TO Fe 66758

31 31 3 FL 150000
TO CIB 150000

31 31 4 Diy Exp All De 53556

TO Fl 53556

31 31 4 FL 1560000

TO CAB 150000

31 31 5 Diy Exp All De 38260

TO Fl 38260

31 31 5 FL 150000
TO CIB 150000

31 31 6 Diy Exp All De 20538

TO Fl 20538

31 31 6 FL 150000
TO CIB 150000

Iud Conversion from Profto Fg FL o

Eg 977233
3113116 Eq Comp Ale De 977233
TO ESC 5000shares 10 50000
To see Prem Blf 927233
 Compound Financial Instrument Early Settlement by payment of
cash
Quest LDR OFA 81 ConnDeb

Ct Fl
Iit Prine
holder
savingsindat

step y Equity
He
Ur
0 500000 inflow
1 5 Goooop a outflow coupon

5thyrendC500000prine.soattlo Step
FairvalveofF.L PV of Fa Elf
40000 XAFof5yrs 127 H 5 00,000 X D F of5thyr 121
427904

step Diff Btw T PMF x Equitycomp

72096

Step EIR 127

Step cat CFI

trended Opn Fairlane Jut 121 Repay Cls
31.3.20 927904 51348 Goooo 439252

31 3 21 439252 52710 40000 451963

313 22 451963 54236 goooo 466198 Eady

settlement
 alia dB Ale Do 500000
TO FL 427904
TO Eq 72096

01 09 22 s
Early Settlement of CFI
He
0104.22 Bls Extra

Payment 525000 Asset

Equals
JEON Ef
EqComp Acpo 72096 OE Eg Comp 72096

Fe All Do 466198
TOCIB 525000
yay go.gg
TOP L RE 13294

Bifurcate Between FL Eg Notin the

ratio of CA Batin ratio of Fair value
Payment 525000
c s

Paid for Fe Paidfor Equity Blf

evised 991204 525000 491204
of pe 33796
10422
u

FlAecDs466198C c.A IEEqCourp72096C c.A

PICAIC Do 25006 TOCIB 33796
TO CIB 491204 TOR E Blt 38300
ab Blf trf to pl EgBlfftrf to R E
 OI mean
Phonics You
Elk
yjs
calculator Sk 4k
Ajay paid AKE 25k

IPhone caculator
21K 4K
Bifurcation Based on Fair value

are Calm of Revised Fair value of F L on 01.04.22

F t pv of Remaining future cashflows
4okxAFof2uns EL p
9y H
XX DF of 2ndyr 91
491209
20 23 313.24
31,3 31,321
0313.22313
pay I
ar CE p.F 91 Gok Gok 40k
313 23 Gok Mr Istyn
Goif 40k
5h
0.917
313 24
494 g gyz In 2ndyr ha
 Illus 84286
Gt Cont Pref
a A
step gut Prine
Holder
Saying
He

O 10L inflow M He Eg
1 3
p a outflow
60000 coupon

3Myrend 10L outflow Prine

Fu of FC
Step
924061

Step Diff Eg
75939

Step EIR 97

Step cat re
Urended op Tut ay Repay CG

30 061 2 92406 83165 Goooo 947226

30.06.73 947226 85250 60000 972477
30.061 9 972477 87523 60000 lol
 Itsy Settlement of CFI on 30thJune x3 i.e afterLyn
Early
payment 11,001000

CA of FL 30.06 3 972477
CA of Eq 30.06 3 75939

Payment 11100,000

Paid for Fl paid for Eg Blt

Revised FV 10,091524 90476
f Fl on

on June X3
If
nly
141 pending 10,00000 xD Fol luv It
NewEIR JE

J E FC 972477 Eg comp Ak Do 75939

PILAR 37047 R EAIC DO 14537

TO CIB 10.09.524 TO CIB Me 90476

 Illus 117 CUR off Bonds
c o
savingsin
Tut Prine OPIE

EL ME
mintpan

StepI Cashflows
Ur CF
O ter inflow
1 8
Gcp a outflow coupon
8thyrend ter outflow Prine

Step Fair value of Fe Pt of FCF

Egg
Gex AF of Jyp 87
4 Icrx D F of 8thy get
8850672

Step Diff Ceacamp

1149328

Step EIR 81

O
 mote Prepare cat for full legs as in part gut isaskedfor
Fe
steps eat full 8yd
ur end apnitakume Jut 8 Repayment as

30.06 2 8850672 708054 6.00.000 8958726

3 8958726 716698 600000 90,75424
XY 9075924 726034 600000 9201958
V5 9201458 736117 600000 9337575
X6 9337575 747006 600000 9489580
XI 9489580 758766 600000 9693347

78 9663347 771468 1600000 9814815

9 9814815 785185 600000 1,0000,000

dart
DÉÉ 01 071 1 C BALL Dr 1.00.00.000
TO FL 8850672
TO Eg 1149328

Part Early conversion into shares

Plate Do Not Apply the concept of Early settlement discussed

as that concept will be applied only when
above early settlement
of CFI is done in CASH

Before conversion 30.06 4 FL 9201458

Eg 1149328
Holders to convert in shares on 30.06.44
opt
J E 301061 4 Fl Alc Do 9201458 Since Face value is
EgcompAlc DS 1149328 missing If feed
1,03 go.gg Bal to ESC
TO ESC
Illus 125 Cont Deb

47
step c F a
Tat Prine Savingsin
Ur got
say go
0 50100.000 inflow t Iq
Eq FL
1 4 300009a outflow coupon Premium
4Myrend 27500000 252 101 prem allot
Brinexsot Fc

Step Fu of FL
3LxAFof4yrs coi.H27 s2xD.F of 4th yr lot

2829247

Step Diff Fg 2170753

Step EIR cot

Step cat Chico not askedin

ques

JI
Dad AB Ale Da 50,001000
TO FL All 28 29,247
TO Eg All 21.70.753
 Initial Measurement of FA UFL
D Acra method
Ian Ithortised Cost
AlreadyDone
Fair value above
a
FA a copy of man named
Etrcost Etrcosts

2 Fair value Methods Initial measurement

c s

Futon R NR FYTPL

only for IA u

1 Day Fair value

He
an Fair value
Directly to par on
Tr cost tr cost DayD
 Subsequent measurement for Financial Asset under all Methods
Reclassifiedto Not Reclassifiedto Pac
FA Irrevocable option
pygypp
Particulars Aera Yitiatiing shares
enter

Initial Measurement Fair value Fairvalue Fairvalue Fair value

Tr st Ts Est Ts Est

To cost Addto Fairvalue Addto Fairvalue Addto Fairvalue Pal

Subsequent Meas Amoatised Cost Fair value Fair value Fair

every yr
value
catch Bal
end

As a when
Jut Dix Income on FA pal Asper Pal ASper pal Div isread Pll
a 112 coz it is Equityshares
fixedDividendRate
i No

J Unrealised GainA loss Oct R Oct HR Pk

I Realised Gain loss PIL pie Pll

On sale of FA

Treatment of Previous Reclassified Not reclassified

to pal to pal
unrealised GainsUlossesbooked in
He
Trf within
ace when the asset is Discussionof other Eq
a R EAR ie it will be
derecognised is done in
Indas 16 Af to R E

CAT Income Ey IndAs16

Renfuorphs
Yr Opn Ju FIR Rep I lost
Ttt to R E
pay agramatised
o il to.ge
Fill on sale ofPPE
yr end

whatever method Realised all are fit to pal

Ey Ite you are using always
 Subsequent measurement for FL

Particulars Acrn FTL

Default fewcases
method prescribed
by
Ind As

Initial rheas Fair value Fair value

C Tr Cost

To cost lessfrom FL pie

Subs Meas AuroatisedCost Fair value

as Bal of LAD

Jutpaid PIL exp PleCexp

Unrealised Realised all Pll

Ofa

Ed are like owners If you

give
Initial Subs Measurement for equity or take
anythingfrom equity
it will be adjusted within
Particulars equity only never trttoPad
D Initial Measurement Diff Btw T.PE Fu of Fe
H
Equity Comp E Tr cost
2 Tr cost less from Eq Comp

3 Subs Meas Not Remeasured it stays on initial Aunt

EXPCoe
Dix paid Diy paid Appropriation of profits
lessfrom other TOCCB
Equity
Unrealised Realised All Other Equity
IF pref sharesIssued
6
L
Equity
FY I
GE
Eq
ipad Pll Hard Other Eckapplied
on FC
Hs

Ques
CF FL
Steph
ur Cf
O lol
13 Hok p a outflow coupon
3rd end ioc outflow prine
yr

D Paine value of Bond 10LX D F of 3rd

yr lot
757315

ID Present value of IntPayments 80k x AF of 34ns lot

198948

cid Fair value of Bond on Day 198948 t 751315 PY of FCF FIR

950263
in J E for Tut
I open
i
Repayment a
3 17 950263 95026 goooo 965289

Id Jut Exp All Do 95026

t

y
OB

FL Ale Da 80000
TO CIB 80000

Owes 10
Duthie
Pret Shares Redeemable Ft Dix Exp pic
Prine Fl

step Cashflows Fe
Mr CF
o 980000 inflow

1 3 19200 a
p coupon outflow
3rd end 20000 Prine outflow
yr
Prine redeemed Prem

Step Fair value of Fl Norelation No CEI No level I

input
FY T p
480000

Step EIR 181

Step int
Yr 14 in Repayment
31131 6 980000 86400 1920g 547200

Accountant
mistakes
Pret shares 980000 Eg incorrect
Dix Jut s Ey CR E Da incorrect
19200

3110311 Rectification
entry

PSC Eg Ale Da 480000

Jut Dix PLL Al CDs 86400 Forrectifying
this I
19200 aeversedi
TO Jut Div R E Alc
TO PSC Fe Alc 547200

he

Recorded correct values on Yr end

Ques 17 LDR

Pref Shares Comestible option holder

Off
te I
Dividend Non Cumulative Prine option Holder Savingsin Jet
1 Notmandatory H I
Not a Fl FL

w.FI
Eg

CF Cnandaton Fc
Step
Ur CF
O 100L inflow
1 5 Not mandatory
Tx
5thyr end 1001 outflow

step
QII.to sonar it

71,29862

step Diff Eg Comp

28 70,138

Step EIR 77
Steps Cat
Yr Repayment
Opn Jut 71 cos
31 03 72 71,29 862 499090 7628952
3 7628952 534027 8162979
Y 8162979 571409 8734388
V5 8734388 611407 9345795
XG 9395795 654205 Before holder
1 oooo ooo
exercises
any option
É
011041 1 CIB Alcoa 100,001000
TO FL 4 005 7 29,862
TO Eq 4 045 28,70 138

31131 2 Jut Exp Alc 499090

TOTE 499090

On maturity 31131 6

If holder chooses shares If holder chooses cash

FL Ier FL er

TO Eg Comp ler to Clb ler

Eg Camp 1,28970138 1er 2870138 41.005 Eg Alc 2870138

TO ESC TO R E 2870138
31,2870138
TO SP
8 De Recognition of FA It
Invest in Deb
Prine
if 2nd
fe sale
drier

to
Fall De Recognition Partial De Recognition
He
D Contractual cash flows fully Discussed Below
received from FA

2 Trf sale of FA
FA CIA 100 Diff trf to pal if any
Sale 120
He

IE CI BAC Da 120
TO FA 100
TOP L 20
 Partial De Recognition of FA
t A
Case A Case B Case c
He 11
3 Definitions 3 Definitions Notmet
case at
Any met Hint first last cases
H A Ct
eg Sale of first Lyrs Jut service service
cling of partial fees fees
Alding midfield De Recog
De Recognition
Full FA will be De Reeg
CA
OPast De Recog
carrying Aunt Part Retained Recognised
Diff Btw S PRCA
again C.I Fair value
Trf to PUL

Past Retained Diff Trf to pal

Bls carryingAunt
3 Definition Points forPartial De Recognition DebtF A Iptine
eg Inustin

of
Part transferred comprises of specifically identified cash flows
leg sale of Jut strip sale of Prine strip
eg

Part transferred comprises of fully proportionate share of the cashflows

leg sale of hot Jatt Prine eg Saleof 307 Tut H 351 Prine

Past transferred comprises of fully prop share of specifically identified cashflows

eg Saleof 401Jutstrip Sale of 307 only Prine

OF Ak will also charge servicefeesfrom Kishanforacting as an intermediary

sale of Jut strip

G to Kishan Fh
Inst in Deb He y c receive
Ret Ltd will
1 IL Kishan
2 31 from
lotof 101
2 IL r Kishan Kishan
forSars
3 11 Day
IL
4 102Gt X
5 let

Of
Saleof hotJutonly 3rd SaleoffiefLyn of Tat
Saleof 1001 Jut a 1st De Reog Saleoflast 2yrsof Tut
only I

Saleof 301 Prine 9201 Tat 2nd

case A
sale of first 201 Tat

g g g g
Saleof loot Prine Jut FallDe Recog egg
None of the 3 Defn Points
case B
Ég6 Sea utd Pg

Step Allocation of CA Between Part De Recognised PastRetained

Total C A 10,00000 Bifurcate in F v Ratio Step2
to 6

PastRetained
Igjegised 107Prin 23694 174532
roux 1010340 17453241,9
3135g
1223960
aint
174532
I
119460

21 service fees 53237

174532 65760
213620

Step Fair value of Past De Reg PastRetained

Total F Y 1223,960
de
Fair value of past De Recog Blf Fair value of Past Retained
Given

122396061213620 101 Prine 29000

F Yofonly
1010340 47 Jut 119460 gut
1846204651607

21 Servicefees 65160

213620
step JI for Partial De Recognition
Bigextract after partial De Re g
CIB Ale Da 990000 Assets
TO FA Past 825968 FICRetainedJ c.A 174532
De Recog lot Prine 23694
TO Pll Gain 164532 41 Jut 97601

21 servicefees 53237

B Assume Sealed Retained first lot Prine first 41 Int

Ego Case
u incl servicefees
Not falling under 3 Def
i it is case Blt Seavice fees

step Step Same as above

Step IE BIS Extract After De Recog

CIB Alc Do 990000 F A CPaotRetained Fx
lot Prine Ale Da 29000 lot Prine 29000
41 Tat Alc Dd 119460 41 Jut 119460
Fair value
27 SedyAssetAlc Dd 65760
21 sea Asset65760 213620
TO FA full 10,001000

to Pll Blf 203620

Diff Btw de case B

IgA
PartialDe Fall De Recog
Recog
PartRetained c a PartRetained Fair value
 De Recognition of FA

Special cases

D Bills discounting

Ak Bills retable th E lol after 3 months

went to Bank Bank promises to 91

pay on
Day

Acc stds childhood Iud AS

A
tyg CIB Alc Da 9L Day when Ak discounts Bills fromBank risk
on

Disc on Biles Da Il rewards are not tht on Day if Bank is unable

TO B R F A toe to collect moneyfrom B R party then Bank can still
held Ak liable

Day CIB Ale Da 9L mist loan of Ear

to Fe loan ar against mortgage of
Bills relable

After 3mouths Jaffkeball

TO Fl Il

FL All Da 10L

TO B R FA lol
2 Factoring

Factoring Factoring
inning
with with Partial
without
Lt
Éatsourter
Recourse Recourse Recourse

Maneenth9m
He
Risk retained 7
ay Co Ak Risk
as toe Retained I Heema
and receive
t
He
Dad CIB AleDa 92 of 291
onDay Ajay
plate Plait Da
page
TO Drs 10L gym
um FA
TO Doss All 10C

Risk Retained with Akita

i Mo De Recog of Das on
Day

CIB ACC Da 9L
To
Dox Fin liab loan 9L

Essence comx
If Risk A Rewardof FA tf De Recog
the FA

If Risk A Reward off Do Not

Not tot on Day De Recog FA
Eg7 Pg33.28

Factoring with Partial Recourse

BIS Extract

Day CIB Ale Da 450000 D St

PIC Alc Da 50000 Asse lab 20k CIA 20k

TO DOS FA 5,00 000 ASK
25k
CIA
Jay GontinuingInvolvement in sset Ale Da 20000 matlab SI
TOIssociated Liability 20.000
CAD

Day PIC Alc Dd 5000

ciabine
ÉÉ p
on
In Day at
they ask the
c
Co to Book
us 5000

tease sooo
enme trf
it to CIA

Dos Raid 2 490000 loss of factor 10,0007

Casef Co will
pay this
as co retained
Asse liab Alc Da 25000 aiskupto 20k
PIC ACC DA 5000

TO CIA All 20000

TO CIB Alc 10000

Case C Drs Paid 420000

Case B Des Paid 25.00.000 lossto factor o lossof factor 81000

Asse liab Alc Do 25000
si
TO CIA Alc De 20000 Pll Blf Do 15000
loss Reversal 5000
to pie TO CIA All 20000
of Day D
TO CIB All 20000
 Illus 114 CAIBIG

Day CIB Ale Da 900

B
PLLALC Da Ser
TO Drs 95Cr
Al Ser CIA Ser

Ale Da Ser
III
Day CIA
to Asse Ciab Ser

Jayd Pll Oser A CIA O Ser

Asse liabo.gg to A O scr

 ModificationAlding

der 107
of Akita 109ns
Chetan loan
given
loan taken v

I L
FA

Yr

3 r

4thyr Repayment x

Repayment schedule change

Jut tot 87 modification

Remains tenure guy 94ns Affing

EINE I
BETwer Fit
 10 Modification Alding
In case of Borrowed FL 9Kishan
step kissed

Check whether modification is Substantial or not

Boy Girl

including trcostoutflow
CA of old Fl on Date of Mod f Pll of Revised future cashflows
Old EIR
X 100
CA of old FL on Date of paan
Medificat is Not substantial
less than 107
I pay
equalto 107 or Modification is Substantial
more than toy
Frigg
Case Case
Moan is Not substantial mod is substantial

step Adj Tr Cost from old Fl

step De Recog old Fe CA

less from C A of old FL Recog Heute Fu

PVof FCF
Mad ER Gi
Tr costAdjfrom c A pig pal
step New Elk
Repaymentschchanged

Step Tr lost Trf to pal

Steph LAT afterModa why assumed
named
Juteirmen OldFC
ar
qpr
Repay cis
step eat after noon
Mw
CAofold Fl Ur Opa Elk Repay Cls
f Tr Cost I
now Fl
Fair value
 Éxample no 2 Pg JOB
coupon 101
Normal Aleling Beforemodification EIR S Dise X
feet
premix
sameas
step Cf FL coupon TC X
Y C F
o IOC inflow

1 to Clap a outflow coupon

lothyrend o s outflow print

me
Step FY of FL NO CFI No relation No level I FV T P
input
1006,000

Step DiffBtwFv9T.P
EIR lot
Step

cat Fc Tiu Date of Modo or or xs

Step
arended Opn Jut It Repayment cos

3112 XO lol IL IL lol

31 12 x1 10L 11 IL lol

31 12 x2 lol IL IL IOL

31.12.73 lol IL IL IOL

31.12 Xu 10L IL IL
TO
CA of old on Date of
Moon ice 011011 5
 Mod of FL 01 01 5 9h
Moan Alding Borrowers ol ol x5

Step check whether modification is subs or Not

am
Datiffindan castitions including trcost
ca of old FL on a pieof Revised future
Old EIR outflow

Col01 Xs
CA of old FL on Date of moan

lol y 1043479 x 100

lol

4.351 not substantial as it is less than lot

approx

lot
can Py of Revised FCF ind Tr Cost old Elk

011011 5 31 12 49

250000
ta 1600,000
Ctr Cost

16 Lx D F of 5th 107 Prine outflow

yr
t zero s coupon outflow
Ct Solex D F of Day tr cost outflow Dani Dateof Mod
161 0.621 4 SKY I
why Add FC in F L ay
1943,4740 Hs is not FY of FL
Here we are computing PYof Revised future
outflowswhere Tut Prine U Tr Cost All are
outflows

T C treatment confused

e s

Pvof Renfuture Fu of FL
cash outflows H
He Tr Cost

Tr cost outflow
always
deduct
PrinceTutoutflow
i Add

FVO

FC
Day Inflow
Dau T.C outflow
less

Pu of Revisedfuture cashflows
prine odd
Jut outflow Y Add
FC outflow
 Moan Not subst

Step Adj Tr Costfrom Old Fl

µ

É FL odd 50000
TO CIB AIC 50000

oilo 1 5 Revised C A of old Fe

10,00 0001 750000
950000

Step New EIR on 01 01 5 why

o Tr CostAdjust from CA
In a Px of Fct Repay son changed
Effy
I
50000

DC 121 2 107
16 ex D F of 5th y 121 16 XD F of 5thyr lot
907883 993474

Interpolation lot 9934744950000 X 12 107

993974 f 907883
11021
approx
Step cat Catterinced Date asperiffons

trend Opn Jut 11.021 Repayment cos

31.12.45 161950000 104690 1054690

V6 1059690 116227 1170917

77 1170917 129035 12199,952
XP 12.99.952 143255 14.93.207
V9 19143,207 159041 161
22487
approxadj

2
EExample No 1 Pg QB

coupon 101
Normal Aleling Beforemodification EIR S Dise X
feet
premix
sameas
step Cf FL coupon TC X
Mr C F
O lol inflow
1 to Clap a outflow coupon

lothyrend o s outflow print

me
Step FY of FL NO CFI No relation No level I FV T P
input
1006,000

Step DiffBtwFv4T.P
EIR lot
Step

cat Fc Tiu Date of Modo or or xs

Step
arended Opn Jut It Repayment cos

3112 XO lol IL IL lol

31 12 x1 10L 11 IL lol

31 12 x2 lol IL IL IOL

31.12.73 lol IL IL IOL

31.12 Xu 10L IL IL
TO
CA of old on Date of
Moon ice 011011 5
 Moan Alding Borromeo

step check inodn Subs or NOT

Add
con a

CA of old FC on Date of Mod PV of Rev FCF ind Tr Cost older

CA of old FC on Date of Mod

COL F 11,13 158

10L

11.321

taodnisSub con
PllofRey.FCFCind.Tr Cost old EIR

g I
31
1211
6 31 12 77
12
31 12 79 31 20
I
31114
011011 5 31 121 5 31 1248

Tr Cost 1,00 000

Coupon st
sole sole 50k 50k sole 50k sok

Prine 15h

coupon S0KXAFof7yrs
iof PrineCt7152XDFof7thyraioy.Youtflows
TrCost T ILY D F of Day
11,13 158
 Mod Substantial

step De RecogadFhUReagMYfntTaw ca
toying
Aut

Ghs Old FC ACC DQ lol

Fair value
TO New FL 958097
41903
ailoilx t
To Pll p of Rev Fa New
Elf
2 Fil of New Fl
5019 AF of Fees 111
4 15L xD'F of FMy 111
958097

Step Tr CostCohen moan is substantial Trf to Pll

Pll OF Trcost incurred on old

Melo TL 10am Assume

sinceold
Derecog TYE
Step CAT After Moeen
ur end Opn Mare Jut it Repayment as

a g y 958097 105391 50000 1013488

46 1013988 111489 50000 1074971

XT 1074971 118247 50000 1143218
48 1143218 125754 50000 1218972

49 1218972 134087 50000 1303059

20 1303059 143337 50000 1396396
21 1396396 153604 50000
1500007
É
Afternoon onDonny
May

CA of old FC Donn a PVofRex FCF t Addie

Old Elk
step Fu of Fl ca o fora Fl Donn

Step EIR
Step cat tin Dorn g in
less shgmorethay
than

qefgg.tt De
step recagoiar RecogstgeewFe

Step New EIR PYOfRevFCF

Newel
DiffPCO
step cat fatter
modD
Step Tr cost
Pll

step cat after mom

 Illus 124 LDR Mod Ques Borrowed

BeforeMadh
step cash flows Fe
an CF trcost
o
50,0000,000 inflow 158 70,096 outflow 49,41 29,904
1 5 were As prince is getting
repaid in Installments

and cashflow table coupon

Repayment
ar ended Open
Facevalue If lit Prine Jut els

31 12 X1 50,00 0,000 5,50 00,000 10.00.00.000 5.50.00.000 40,0000,000

X2 40,0000,000 4,4000,000 10.00.00.000 4.40.00.000 30,0000,000
3 30,0000,000 3,30 00,000 d 33010 000 20,00go
Xy 20,001001000 2,20 00,000 10.00.00.000 2 20100,000 10,0000,000
XS 10,00100 000 10.00.00.000 10100,000 Mil

FairvalveofF.L Norelation No CFI Molevel input Assume Fu

Step TI
FY T.PE TC
50,0000,0001 158 70,096
49,41 29,904

Step EIR Il SUI

AND
step
cat tin Date of Madd
step
arended Opn Fairvalue Jut ÉÉ Repayment lls

3112 1 99,4129,904 5 68,24939 15 50 good 39,5954,843

31 12 2 39,5954,893 14her 9,40001000 39 74,89 650

4,55 34,807
only'Iutpayment
of Prine Facevalue hoer 3112 2
mentionedin ques
Modification of FL 31 121 2 Borrower

step Cheek whethed Mod is subs or Not

mot.contnod CAofoldFlonDateofrnodn
WN
PYofRevFCFCind.Tr.cost Old Elr

CA of old Flon Date of Mod

39,7489,650 f 4511522,791 100 13 591 noon is subs

39,74 89,650

conf Cashflow table for Revisedfuture cashflows Repay

Face awe
Urended
apn ofofsprine Jut 1st prine gut
31.12 3 Gour Gor Ger Ger 36er
44 5 her hor 32er
36er 5Ger

XS 32er 4.8 er hor 4 for 28 er

16 28W 42in Ger 42in 24er

x1 24er 3Ger hor 3Ger Loar
XP Loar 3or hor Gor lber

79 Her 2 her au 2 her Ker

20 Her 1 ter hor 1.8 er der
21 Per 1 her hor 1.2W her
22 her O Ger

Yai
 Revised Fct Present value Old EIR d
ai Revised FCF DF 11 51 Dit i
31 12 73 10er
Xy q her
45 8 8 er
XG 8 her
7 7 Ger

Xo ter
6 her
Xg
20 5 8er

21 52 er

22 4 6W
PH 95,1522,791 Py 40 or
why hoer
when coupon Elk
Face value Fair value
Step De Recogold FLU Recog New FL

31 121 2 Old FL Alc De 39.74.89.650 Caddying Aut

PIC Alc Da 25 10,350
TO New FLAC 40.00.00.000 Fair value Pvof RevFCF new
He
541
Teams Revised
Step Tr cost PIL
Mir gut coupon 151
Modise Noprem Monthan

cat after Mod New coupon

step
MewEl urendedopnCFairnaweofJut
FY EiIiRep.ay Cls New
31 12 3 900 Ger loor 36 or
any asked till here
 Hint Alwaysaefer CAT Upass J E
Journal entries still 31 121 3

or old UB Alcoa soar

to Fl SOW
Oi or X1 FL 5870,096
Ctr Cost ya 58170,096

31 121 1 Int Exp All Da 5,6824,939

TO FL 5,6824,939

31 12 X1 FC Ale De 15 Ser
TOC B 15 Ser

31 121 2 Int Exp All Da 9.55.39.807

TO FL 4,55 39,807

31 12 72 FL Alc Dl 9,4000,000
TOC B 4,4000,000

31 12 2 Old FL Ale Da 39,7489,650

rn'ddn PIL Alc Da 25,10350
J E TO New FL 40,00100000

31.12 3 Jut EXP Ale Da 16g

TO FL Ger
31 12 X 3 FL Ale Da 10W
TO LIB tour
 modification Ed Elk cannot change
in Mod of FA
In case of lender Fa

Hint Borrower's Mad

old becomes
step ca of old FA on Date of thedm step
lender's a step
step
Pll ofRevised futurecash flows Old EIR new
step

M din FA

step PassJeformod
Nomadcases Trf to pay
LBIF of this entry If there is Adjfrom Prepaid
relation fog Employer EBE

fatter inodn Epee

step cat
 Illus 123 LDR
lender CFA Pre
existingrelationship Employer Employee
FF T PTY PV of FCF EIR

Before thodn

Step Cashflows FA
Yr
0 101 outflow

1
2

3 230000 Gagarin owes

4 216000
r

step Fu of FA Fv Prof FCF EIJI Relation

ur CF DF 121 PY
31.12 x1 258000
X2 244000
73 230000
XY 216000
XS 208000 843878 approx

Step Diff Btw ToPrice Fair value

10,00100067843878

156122 Prepaid EBE aloft over the period of loan i e oxed Sgu

EIR 121
Step
Step LAI Ctia Date of Modn 31 12 2

ur ended Opn Fairlawn Tut 127 Repayment as

31 12 1 843878 101265 2580001 687143
687143 82457 1244000 525600
Daffoftnod

MoonAlding 311121 2 lender FA

525600 old
CA of old FA Date of moon
Steph on

PV of Revised FCF old Elr 358673 New

step
On Date of moan 166927 Reduce FA

WI PVof Rev FCF

I 1 I
31 121 2 31 121 3 31 12 75

I 208000
2 0000
I
prepay
q
Eff separately C F 121 folder PV
casperIAI ar D F
1 3112 3 216000
2 31.12 4 208000
358673
On 31 12 2

CA of Old FA 525600

Prepaid EBECCA 93674

 we Prepaid EBE
ur apn
way3561245465
Ces
31 12 1 156122 21224 124898
31 1242 124898 31224 93674

Étep Pass J e formed

1121 2 CIB Ale Da 200000
TO FACloantoemp 166927 Step step20
to Prepaid EBE
33073

Normal dates Difftof to pal

Intuis ques there is relationship adj diff from Prepaid EBE

On 3112 2 Revised CAafter Moda

FA loan 52560017166927 358673 Prepaid at for

remain'd24ns
Prepaid EBE 9367g a 33073 ago w off
over remaining 34
2 yrs
TenureReduced
why
cat Catterinadn
i aloft Prepaid EBE
stay Op Maw Jut 121 Repayment ca
over 24ns now

358673 93041 216000 185714

31 12 3
31 12 4 185714 22286 2080003

Prepaid EBE Cover24ns

New
ur Opn aloft cu
31 12 3 60601 3103007 30301
3112 Xy 30301 30301
 Jovanal Entries
oiloi X1 FA loan to eup Alc Ds 843878
w off over Tenure of loan
Prepaid E BE Alc Do 156122
TO CIB 10.00.000

31 121 1 FA Alc Da 101265

TO Tat Ine 101265

31 12 X1 CIB Ale Da 258000

TUFA 258000

31 121 1 EBE PIC Alc Dd 31224

TO PrepaidE BE 31224

31 121 2 FA Alc Da 82457

TO Tat Ine 82457

1 121 2 CIB Ale Da 244000

TO FA 244000

1 121 2 EBE PIC Ale Da 31224

TO PrepaidE BE 31224

Prepaid
31 121 2 CIB Ale Da 200000
Ioan TO FACloantoemp 166927 Step step20
33073
city to Prepaid EBE
Normal dates Difftof to pal
In this ques there is relationship adj diff from Prepaid EBE
31 121 3 FA Alc Da 93091

TO Tat Ine 93091

1121 3 CIB Ale Da 216000

TUFA 216000

1121 3 EBE PIC Ale Da 30300

TO PrepaidE BE 30300

31 121 4 FA Alc Da 22286

TO Tat Ine 22286

112 XY CIB Ale Da 208000

TUFA 208000

1121 4 EBE PIC Ale Da 30301

TO PrepaidEBE 30301
 Question7 AR
Before Mod FA No relation No Cte No level limpet

step CE CFA
Ur C F
O 20 outflow 2.1 or
Ioc outflows
1 2 of coupon
2nd rend 2 her inflow

step Fu of FA
Add FC in case of FA
Fil z TP TE
Ler t lol
2 I Cr

Step EIR 6.91

Step CAT Ctia Date of Moda

ur ended Opn Fat 6.97 Repayment as

31 03 18 2,10 00,000 14.49.000 2,2449,000

Moan
Date

Moan Alding lender FA

31.3.18

Step CA of Old FA on Date of Moon 2,24 49,000 old

Pv of Rev FCF old Elk 2,05 79,981 new

step
2.2 er xD F of ly 6.91

fin F A 18 69,019
Step Pass J E

ABDI unlike Pree Gees there is No Prepay No CIB

PIL Alc De 18.69.019 why pal if it is normal Ones i e

Menttoifftopex
Telation
To FA AC 18.69.019

Step cat fatter Madd

arended Opn Mamet Iut 6 at Repay Ccs
31 3 19 2,05 79,981 14,20 019 2,2000,000

JJ.EE 1 4 17 FA Alc Dd Ler

TOMB Ler

FA Alc Da lol
11117 TOCIB lol

31 3 18 FA Alc DO 14 49,000
To Tut Inc 14 49,000

31 3 18 PIL All Da 1969,019

Ife TO FA Alc 18,69019

31 3 19 FA Alc Da 14,20019
TO Tut Inc Ale 14,20 019

31 3 20 CIB All Dd 2 20,001000

TO FA 2,2000,000
 WR Thad FA
Quest Relationship Employer Employee
BeforeMad

Step CF CFA
ur Cf
5L outflow
1 3 0 Of coupon
3rdyr 5L inflow Princip

Fv Pu of Fa FIR Relation
Step Fu of FA
51 xD F of3rd 51
yr
431919

Step Diff Btw FY UT P

50000061431919
68081 Prepaid EBE aloft over Tenure of loan i e 34m

step EIR 51

EI cat till Date of mod

ur ended Opn Jut 57 Repayment Cls
31 03 72 431919 21596 953575

22676 976191
10313953575
Date of Moda
 Mod lender FA
Alling 311031 3

Step CA of old FA 976191 old

Pll of Rev FCF Old FIR 205676 New

Step
in FA 270515

I N I l
311031

5,41311
alloyx1 2 311031 3 311031 9 21031 031 7

further 34ns
Mod Date
8 111 252000 xD F of 4thyr st
250000

205676

step PassJ.E

Prepaid EBE Alc 270575

TO FA All 270575
H
Asper III pic 270575
top 270575

Revised CA of FA 4761914270575 205676

Step cat Catterinod

Opr Mane Jut 57 Repayment as
375.7
aus naw
75
X6
255000
X7
E only asked for initial Recog 9 modn Entry

01 0441 FA Alc Da 931919

Prepaid EBEAK 129 68081

TO 913 5.00.000

3131 3 Prepaid EBE All 270575 Ideal entry

TO FA All 270575
H
As
per III pic 270575
top 270575
 Regular way purchase sale of FA
leg shares purchased sold in stock market generally takes 2 Ttl days for

settlement i e Orderplaced on 011041 3 may get settled on 031041 3

Trade date settlement

Aiding
Conlon1 3

Mote D Co has option to record the sale purchase on Trade date settlement
date
2 Co should follow the opted method consistently

Illus 105
Ofa Assume money was deducted on 091011 1
101 ofcourse the price which was quoted
How much money was deducted on thedate of placing the order
s
log
will be deducted 10L

CASE A Co chooses trade date Accounting FA will be recorded on Tradedate

Oe loi X1 FA Alc Da 10L

lol
TO
IX Payable

09 011 1 Payable Ale Da lol

TO CIB Me IOL
041011 1
He
FA
Fair value bacon Fifocea NR Fx Pl
191st FA Ale Da 0.51 FA Alcoa 0.51
Bookunrealised TO PIC
Gain TOOCI RINK 0.5L 0.5L

CASE B Settlement date Alding FA recorded on settlement date

claim s No entry

091011 1 FA Ale Da 10L

TOC1B lol

041011 1
He
FA
Fair value bacon Fifocea NR Fx Pl
10.52
Ie FA Ale Da 0 51 FA Alcoa 0.5L
Bookunrealised TO PIC
Gain TOOCI RINK 0.5L 0.5
 APPY Impairment provisions
Impairment of FA Furoce alum Iup loss if any trt to ple
u i Fut Pl s Noneed to apply As 1095already
Imploss as Trf to Pll impairmentpm being tot to Pll

loss Allowance
Computation of Impairment loss
He

2 Methods

e s

12 month Expected lifetime Expectedgredityoss

credit doss method Method
12 mouth Ece lifetime ECL
He
FA risk is less FA diskis more

ie ietimely repayment are not

timely repayment are
see'd No risk lessaisle read i Risk is higher
losses expectedfrom FA in Id losses expected from FA
Ey
upcoming 12 mouths are computed during the full life of FA
is computed
Debtor FA
Aunt Prob
forexpected yupha go woman
I Is ix
loss ok
2 52 0.27 1000

lol I1 10k
3
Y 152 27 30k
5 051
251 12801
 loss Bifurcation in case of FA measured at Futoct

Eg FA FUTOCE Book Value 100

4 by Flo
Fair game 90
Given
E
2
Imploss Given Fair value loss Given

JE PIC Implies Alc1293

OCI Fu loss Alcoa 7
TO FA All 10

Illus 50 Refer T B

Illus 57 Total loan Cu 500000 12000loans

Gross total c a
caper client
Group X Esq 2.00.000
Group Y 1000 CU 300 3 00,000

Default Defaultloan total Gross Pilot 1055 1 1Rate

loan Default Caven
GroupX Ggg
Cu 200
go 600
03
6 000
10

Y 600 950
015
138 10

Ques9 151031 1 FA FUTOCICR AIDS 1000

TO AB 1000

31 31 1 PIL CImploss ACDr 30

OCICR FYloss Alcoa 20
TO FA Ale 50
CA 31 31 1 950
011041 1 Bank Alc Da 950 sale Price No profit losson sale
TO FA Alc 950 C c.A
950
sp 950

ditty Reclassification of
prey
loss from Oct to pal
pie Alc Dd 20
TO OCI R 20

Derivatives
he appreciate
É
Defn my Uday
u 78
Make changes due to an

No little initial investmentundying

Future settlement

Alding for Derivative contract

Measured through FYTPL
 Illus 118 LDR
alula no entry 6.0090

3103 71 PIL All Dd 25000 1315313 1

TO Derivativefinancialfiats DFL 25000 DFL 25k

30 06 41 s DFL All Da 10k

10 Pleffeferse 10k Bls30.064
DEL ISK

30 091 1 DFC Ale Da 15k

DFA Alc Da 12K Bls 30.09 x
TO PIL 27k DFA 12

mktprice
psell 13.20.060
311121 1 CB Ale Da 820000 766 8
Again
Plc Ale De 1311 52000
Settlement

TO UB 20000 X 7681 13.60.000 purchased promised

rate
TO DFA Reverse 12000

Being Derivative contract settled

25000 10000 27000 520007 11010940ooo

OEIIt He

8681 7661 x 2000

 Illus 120 Option
I e
written putoption Can but
He
Right to right to
Obligation to Buy
Buy sell
Holder writer
He Holder whiter
Rightto obligation t o
to sell
Bay Right Obligation
to
to
sell Bay

Olla X1 no
entry

3103 71 Pll Ale Da 25000 BIS 313

DFL 25000 DFL25000

BIS 30.06
30 06 41 DFL AIC DO 16000 DFL 15000
TOPIC 10000

30109 X1 DFL ALDS 15000 131530.09

PIL 15000 DI

31 12 41 CLB Alcoa 20000776618 1320000

PIL Ale Da 40,000

TO CIB 20000X 7681 13.60.000

 Embedded Derivatives

BY tons
Elton Ito USCo Gangster Hd
eg 1
9h

Indigo E
Pyrmont in
7
3rdcurrency when we choose to
settle in 3rd currency we

Derivative portion say that the Host contract

Derivative contract are

Not closely related
He
separate Alling of host
contract te derivative
contract
Embedded Derivatives

I 4

Host contract Derivatives

contract

whether they are closely related

g Indian co purchases
yEs pi from us co 3rd
9 Indian co purchases is in
payment
from us co payment separateAlering em
is either in For No needto ofHostcontract 4
Derivative contract
do separate

Alding
 Illus 100 WR
Embedded Derivatives not closely related

u i
Hostcontract Derivative Contract
He

Bly Solar Panels Tosettle in

He
Cusp

Delivery after 6months Bay Morate

i e 301061 1 fixed on
H Day
toBay
ABGBooks Indian Co

oil oily No
entry we could have
locked the
Bay price
301061 1 Solar Panel Ale Da 73250 million
on Day for 30.06
Redford rate to Payable Ale
2651
73250 million
Gmfinddate
Day Delivery som x 2651
dayforwarddate Derivatives
H Alding
7651 odor x1 No entry

E na've locked the s 30 061 1 Pll Aledo 750m

Bay 2651 But we did to DFL 750m
Not Now we have to
som x 7651 7661
Buy 7661
i loss of 71
301061 1 DEL Ale Dr 50M
To Payable 50m

ICAI Does
4301061
1 Payable AleDa 23300m 507866187
not Pass TO dB 23300m
flu's
entry E3250T 250m
 Illus 119 CUR EmbeddedDerivatives
to to
Host contract Derivative Contract
I
sell Equipment To sell

after Gon i e on 301061 1 why sell on sale of equip we

will receive I will sell it as
pay'D Delivery Dayfind
my currency is I
rate 7551 we could have fixed the sell

eloiX1 No
entry price at 2551 Day
6m
Fate
30 061 1 Retable Ale Da 5501 Derivative Alding
TO 75501 oiloilx No entry
Equipment
101 X 2551
31 03 71 PIL 7100L
loss
why
we could have locked
TO DIE 1001

the sale 101 X 7451 HE 551

price He
7551 But we did findrate fudrate
Not now the rate 3006 30.06
is 7451
30 06 1 Dfe Reverse Alc 001

C IOLXE55 DEA Ale Da 501

260
TO PIL 150L

30.06.41 Retable Ale Da 502

TO DFA 50C
30.06 XI CIB GOOL
10476018
IET to Retable
550450
Goo
Illus 102 waited 3 line concept
p
Embedded Dedicative
Y

Host contract Derivative Contract

He

Purchase machinery to Bly

On 31 121 1 we could lock
He Buyprice
Day Del Day Fuld Rate 767181
But we didnot
76781

É oglog x1 Noentay
mm
30 09 71 DFA 3.00.000
31 121 1 machinery PPE Alc Dd 678L TO PIL 3,001000

TO creditors 678L 8101 767.5 767.8

101 767 8 8
31121 1 DFA 500,000
TO PIL 500,000
101 X E 678 67
H
8 00,000 El 3,09000
He He
Ason date already
Booked

31 12 71 Creditors Alc Da 8,001000

TODFA Reverse 8,00100

Extra Entry Creditors All Da 670L

TO CIB 670L
 Exclusive
How to differentiate Btw Derivatives Q Emb Dean
He

NO
Westmead a Host Contract
3rd
currency

Ques 6 CUR
BIS Extract 31 3 2 Pll Extract x1 x2

I Asset Finance Income

Fin Assets Gainon TatRateop 5250
JutRateoption 15250 Mon 61 Deb EIR 12000
1 Deb gzoo

Inestin Eq shares 187500

Interest Rateoption
FA Caption Ale Da 10,000 313 2 FA Ale Da 5250
Day
To CIB yoooo Urena to Pll Cain 5250

Deb_CFA
G EInd Op Jurek Reply as
FA Ale De 150000 3103 2 150000 12000 9000 153000
Sayf
TOCLB 150000

Day Fu TP since No relation Mo CEI No level I input

read FA Ale Da 12000

Used IB 9000
TO Fut Ine 12000 ppg 9000
 Shares purchased Fatih irrevocable option FYTOCCMR
oil to1 1 Invest in Eg Shares FA Da 175000
TO dB 175000
50000 shares xqz.gg

31 31 2 Innest in Eq Shares Ale De 12500

To Pll AMO there 12500
soleshares x 173 75 E3 5

ICAI Also notshownby

ICAI in extract

above
In exam Mote of method followed Faroe HR show
give gain
of 12500 in OCI CMR
 HedgeAccounting Ashish Dubai spayment

Crisk mitigate reduce and disk after

Gmoutus

FRwithAk hums
classes
Cash flow Hedge aka
Here we will hedgefuture incoming cashflows
IndianCF

Alding
75 Diahann
Hedge contracts Remeasured thorough OCICR 1
fixed on
Day

Clues 14 WR cash flow hedge

v u

Host contract Hedge contract

sell Inventory after 6m i.e 301091 1
TosH
ifIftxedonDau CDel.Day
spot Rate C HedgingDone
v

01 04 41 Noentry Because on
selling Inventory
we will receive Sell to
0 091 1 s Bank Trade'Re'ables Alc Dd 7200 convertinto 2
To Sale of Inventory 7200
Revenuefromop

100 X 7721
Asper ICAI
 x Hedge contract Alding

why Present value

Oi on X1 No Because the expiryof
entry
contract is on 30thSept
ie after 3m fromtoday
30 061 1 DFA Hedge Contract Alc Da 200
discountgainby 3months
197
TO PX OCI R 200 197
8100 776 274 197
3m
79
ftp.a i e 1.5
perqtr

301091 1 DFA Hedgefuture's contract Ale Da 303

TO OCI R 303
8100 276
77,1 25001 77197
took
Her we
byte
2711 insteadof
of 772 as done by
ICAI

3010911 Bank Ale De 500

TODFA future contract Ale 500

offaly ace R Alcoa 500 off

TO pie a 500 1004 176 7600
Reclassify the
gain of
ace p to pie
Inques 500 72007700
Baule
Conceptual
why extra cool error
as we have 2 diff
spot rates
IFTow to differentiate Between Embedded Derivatives Hedge Aleing
C u

Host contract is not Host contract is hedged

hedged
3rd currency involved No 3rdcurrency involved

Difference in Accounting
I
to o
Embedded Derivatives Cashflow Hedge Accounting
te t 1
Host Deaivatite Host Hedgecontract
delivery after Gm contract I
Gm feed Price is not locked DeliveryDay Price is locked
rate Remeasure thru pie spotRate RemeasurethmocIC

Settlement Date
Reclassify OCI R
to PIL
 Financial Guarantee

loan Prine to crores

Ajaygild Dena Bank
181 a
p Tenure syn

guaranteeloan
Ajay's
warrant
AkHd
if Jut without guarantee
127 Jut with guarantee

Fin Guarantee Alding

He

Akita
He gave guarantee
Alding is done in the booksof Akita of this Financial Guarantee

Flt is Booked at its Fair value on Day

without

ur Jut 187 Jut 127

BenefittoAjay ight guarantee
P
savings
I 1 for 12 er o Ger

2 lifer ther O Ger

3 Iver Ker O Ger

lidar ther o Ger

y
5 1 der 1 her 06W

11,8763,026
Fall of FG on Day
 Initial Measurement FG Futpl
JE in the books of Akita
Daud PIL Alc Dl 1,87 63,026
To FG Uab 1,87 63,026

If Ak charges commission to Ajay

CIB MC Da xx
TO Pll Comma xx

Assume in above case Ale Parent gjay

subs

I
parentgivesguaranteeforsubs
Day Pll Innistin Subs 1,87 63,026
TO FG 1,87 63,026

Note No commission in this case as in max cases

parent wont charge comma
to Subs
 of FG each trend
Subsequent measurement on

Higher of
Amoatised Aunt of FG on trend Ape Et of Far 16140371
wayHigher
H
Conservatis

Prine Hunt x s floor x 51 50.00.000 Highercrab

g
Prob.gg ultn Gaven means more
conservatism

Ques
in
Savings
notional
Cmotional
an Facent gadggaranted

ur opn Jat ER 181 Repay cos

I 1,8763,026 33,771345 60 00,000 1,6140.371

Note In reality the above Iat Repayment is not accusing This is all notional
Just to compute the values

Arend FG AK Dd 2622655 Note In subs Meas Mor y in

gE
to Pll 2622g FG will be trf to pal
He
18763026416140371 irrespective of aelationship
 Illus 127 LDR
Relation Parent Subs
Fair value of Foon Day
ar Iut Savings Dr in P
I 1 10,000 80,000 30000
luIithoutguaraiteesIatgg.f'githarantee
2 1,101000 90,000 30000

3 1 10,000 30000
73311

JE In the Books of Sunita

01 091 1 PI Inst in Subs noon All Da 73311 Bls or out
TO FG 73311 Far 73311

31 31 2 FA Alc Do 21936 Bls 313 X2

TOPIC 21936 FG 73311
73311 537g 1 219367 51375
31 3 73 Flt Ale Da 21375
TOPIC 21375 BIS 3103 x2
57375 300001 FG 51375
1371 30000
Subs Meas fwm 31 03 72 31031 3
a
Amortised Auntof Fg 57375 27026
PrineAunt4 Prob ofDefault 10000 30000
101 17 101 37

Opn Jut ily Repay as

31 03 2 733 8064 30000 51375
31 03 73 51375 5651 30000 27026
3rd
31 03 9 27026 Opr wont change not asked for yr
Direct Owes
Inns 101 Refer T B
Ques 16 MTP RTP pp

UR a Class d s write 9 Practice

FI 150 Ques small conceptualOnes s JustIReald

MoteBook
FI Concepts

FI Revising 3hr approx

EA