AASB 139 requires that,subsequent to initial recognition,financial liabilities other than those designated as at fair value through profit and loss must be measured at amortised cost using the:
A) effective interest method
B) nominal interest method
C) simple interest method
D) compound interest method

Question

Quizplus · Accepted Answer

AASB 139 requires financial liabilities other than those designated as at fair value through profit and loss to be measured at amortised cost using the effective interest method. This method calculates the interest expense for each period by multiplying the carrying amount of the liability by the effective interest rate. It allocates the interest expense and the principal repayment between the interest income statement and the carrying amount of the liability on the balance sheet.

AASB 139 Requires That,subsequent to Initial Recognition,financial Liabilities Other Than