ipsas 29—financial instruments: recognition and measurement - IFAC

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FINANCIAL INSTRUMENTS: RECOGNITION AND MEASUREMENT Dr Surplus or deficit (gain) CU9,518 Cr Separate line item in the statement of financial position To remove the remaining line item balance on expiry of the time period. 1275 CU9,518 IE29. The net effect on surplus or deficit (excluding interest revenue and interest expense) is nil reflecting that the hedge is fully effective. IE30. Entity A makes the following accounting entry to amortize the line item balance for this time period: Dr Surplus or deficit (loss) CU11,377 Cr CU11,377 (a) To recognize the amortization charge for the period. (a) CU22,755 ÷ 2 Summary IE31. The tables below summarize: (a) Changes in the separate line item in the statement of financial position; (b) The fair value of the derivative; (c) The surplus or deficit effect of the hedge for the entire three-month period of the hedge; and (d) Interest revenue and interest expense relating to the amount designated as hedged. IPSAS 29 ILLUSTRATIVE EXAMPLES PUBLIC SECTOR
FINANCIAL INSTRUMENTS: RECOGNITION AND MEASUREMENT Description Jan 1, 20X1 Jan 31, 20X1 Feb 1, 20X1 Feb 28, 20X1 Mar 31, 20X1 CU CU CU CU CU Amount of asset hedged 20,000,000 19,200,000 8,000,000 8,000,000 8,000,000 (a) Changes in the separate line item in the statement of financial position Brought forward: Balance to be amortized IPSAS 29 ILLUSTRATIVE EXAMPLES 1276 Nil Nil Nil 22,755 11,377 Remaining balance Nil Nil 45,511 18,963 9,518 Less: Adjustment on sale of asset Nil Nil (3,793) Nil Nil Adjustment for change in fair value of the hedged asset Nil 45,511 Nil (9,445) (9,518) Amortization Nil Nil Nil (11,378) (11,377) Carried forward: Balance to be amortized Nil Nil 22,755 11,377 Nil Remaining balance Nil 45,511 18,963 9,518 Nil (b) The fair value of the derivative CU20,000,000 Nil 47,408 – – – CU12,000,000 Nil – 28,445 No longer designated as the hedging instrument. CU8,000,000 Nil – 18,963 9,518 Nil Total Nil 47,408 47,408 9,518 Nil (c) Effect of the hedge on surplus or deficit Change in line item: asset Change in derivative fair value Nil 45,511 N/A (9,445) (9,518) Nil (47,408) N/A 9,445 9,518 Net effect Nil (1,897) N/A Nil Nil Amortization Nil Nil N/A (11,378) (11,377) In addition, there is a gain on sale of assets of CU14,607 at February 1, 20X1. (d) Interest revenue and interest expense relating to the amount designated as hedged Interest revenue – on the asset Nil 172,097 N/A 71,707 71,707 – on the swap Nil 179,268 N/A 62,115 62,115 Interest expense – on the swap Nil (179,268) N/A (71,707) (71,707)
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IPSAS 29—FINANCIAL INSTRUMENTS: R
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FINANCIAL INSTRUMENTS: RECOGNITION
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Introduction FINANCIAL INSTRUMENTS:
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ipsas 29—financial instruments: recognition and measurement - IFAC

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