Amortised Cost

IFRS 9 Definition of amortised cost: The amount at which the financial asset or financial liability is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount and, for financial assets, adjusted for any loss allowance.


Subsequent measurementFinancial asset

This is part of the classification of financial assets. A financial asset is classified as subsequently measured at amortised cost if (IFRS 9 4.1.1):

The asset is measured at the amount recognized at initial recognition minus principal repayments, plus or minus the cumulative amortization of any difference between that initial amount and Amortised Costthe maturity amount, and any loss allowance (impairment). Interest income is calculated using the effective interest method and is recognized in profit and loss. Changes in fair value are only recognized in profit and loss when the asset is derecognized or reclassified.

But do not forget the fair value option.

Subsequent measurementFinancial liability

A financial liability is classified as subsequently measured at amortised cost, except for the following financial liabilities that are measured at (IFRS 9 4.2.1):


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