ipsas 29—financial instruments: recognition and measurement - IFAC
ipsas 29—financial instruments: recognition and measurement - IFAC
ipsas 29—financial instruments: recognition and measurement - IFAC
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FINANCIAL INSTRUMENTS: RECOGNITION AND MEASUREMENT<br />
Calculations<br />
Table 1: Amortization Schedule (Using Contractual Repayments at 6% Interest)<br />
Year 0<br />
CU’000<br />
Year 1<br />
CU’000<br />
Year 2<br />
CU’000<br />
1283<br />
Year 3<br />
CU’000<br />
Year 4<br />
CU’000<br />
Year 5<br />
CU’000<br />
Year 6<br />
CU’000<br />
Capital 250,000 250,000 250,000 250,000 250,000 250,000 250,000<br />
Interest – 15,000 15,000 15,000 15,000 10,500 6,000<br />
Payments – 15,000 15,000 15,000 90,000 85,500 106,000<br />
Balance 250,000 250,000 250,000 250,000 175,000 100,000 –<br />
Table 2: Discounting Contractual Cash Flows (Based on a Market Rate of 11.5%)<br />
Year 1<br />
CU’000<br />
Year 2<br />
CU’000<br />
Year 3<br />
CU’000<br />
Year 4<br />
CU’000<br />
Year 5<br />
CU’000<br />
Year 6<br />
CU’000<br />
Capital balance 250,000 250,000 250,000 175,000 100,000 –<br />
Interest payable 15,000 15,000 15,000 15,000 10,500 6,000<br />
Total payments<br />
(capital <strong>and</strong><br />
interest)<br />
15,000 15,000 15,000 90,000 85,500 106,000<br />
Present value of<br />
payments<br />
13,452,915 12,065,394 10,820,981 58,229,497 49,612,576 55,164,117<br />
Total present value of payments 199,345,480<br />
Proceeds paid 250,000,000<br />
Less: Present value of outflows (fair value of loan on initial <strong>recognition</strong>) 50,654,520<br />
Off-market portion of loan to be recognized as expense 199,345,480<br />
Table 3: Calculation of Loan Balance <strong>and</strong> Interest Using the Effective Interest<br />
Method<br />
Year 1<br />
CU<br />
Year 2<br />
CU<br />
Year 3<br />
CU<br />
Year 4<br />
CU<br />
Year 5<br />
CU<br />
Year 6<br />
CU<br />
Capital 199,345,480 207,270,210 216,106,284 225,958,228 161,943,735 95,067,265<br />
Interest<br />
accrual<br />
Interest <strong>and</strong><br />
capital<br />
payments<br />
22,924,730 23,836,074 24,852,223 25,985,228 18,623,530 10,932,735<br />
15,000,000 15,000,000 15,000,000 90,000,000 85,500,000 106,000,000<br />
Balance 207,270,210 216,106,284 225,958,228 161,943,735 95,067,265 –<br />
Financial Guarantee Contract Provided at Nominal Consideration<br />
IE43. Entity C is a major motor vehicle manufacturer in Jurisdiction A. On January 1,<br />
201V Government A (the issuer) enters into a financial guarantee contract with<br />
Entity B (the holder) to reimburse Entity B against the financial effects of<br />
IPSAS 29 ILLUSTRATIVE EXAMPLES<br />
PUBLIC SECTOR