Sunteți pe pagina 1din 1

LOAN RECEIVABLE

INITIAL MEASUREMENT To record the loan


 Fair Value + Transaction Cost +++ Loan receivable xx
Cash xx
Consider the following in the initial measurement;
costs directly related in the granting a loan to a To record the receipt of origination fees
customer or borrower: Cash xx
1. Origination Fees Unearned interest income xx
a. Evaluating the borrower’s financial
condition To record the payment of direct origination costs
b. Evaluating guarantees, collateral, and Unearned interest income xx
other security Cash xx
c. Negotiating the terms of the loan
d. Preparing and processing documents To record collection of loan receivable
e. Closing the loan transactions Cash xx
** if origination fees are received from the borrower, Loan Receivable xx
record it as unearned interest income
2. Direct Origination cost – not chargeable to To record amortization of unearned interest
customers income
3. Indirect Origination costs – treated as Unearned interest income xx
expense Interest Income xx

Principal Amount xx
Less: Origination fee received (xx)
Effective interest rate using interpolation
Add: Direct origination cost xx
Initial Present Value or CA xxx
X = Lower Rate + [HR – LR] x

Subsequent Measurement
 amortized cost using effective interest
rate method
** since LR frequently involves
transaction costs, a new effective rate
should be computed through
interpolation

GOLDEN RULE
“the higher the interest rate, the lower
the present value”

S-ar putea să vă placă și