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Hi,
If Entity A issue a loan to a bank at 5%, but the market rate for similar loan is 3%, then Entity A would discount the cash flow of the loan to calculate it's fair value.
The difference between the consideration received and the fair value of the loan is recognized in P&L immediately is that correct?
Thank you.
Kind regards.
If Entity A issue a loan to a bank at 5%, but the market rate for similar loan is 3%, then Entity A would discount the cash flow of the loan to calculate it's fair value.
The difference between the consideration received and the fair value of the loan is recognized in P&L immediately is that correct?
Thank you.
Kind regards.