注会-会计英语讲义(6)

会计英语基础讲义

are held to maturity investments and loans and receivables, which are

measured at amortized cost, using the effective interest rate method.

5. The way in which gains and losses on remeasurement are treated also depends upon the classification of the instruments. Gains and losses relating to instruments at fair value through profit or loss are recognized in the income statement, even if they are unrealized. Gains and losses relating to changes in the fair value of

available for sale financial assets are recognized in equity and recycled to the income statement when the asset is sold. Changes in amortized cost are recognized in the income statement.

6．金融资产的减值：the impairment of financial assets

At each balance sheet date, an entity should assess whether there is any objective evidence that a financial asset or group of assets is impaired. Indications of impairment include： (1) significant financial difficulty of the issuer; (2) the probability that the borrower will enter bankruptcy; (3) a default in interest or principal payments; or (4) (for available for sale financial assets) a significant and prolonged decline in fair value below cost.

The recognition of the impairment of financial assets：

(1) For financial assets carried at amortized cost (held to maturity investments and loans and receivables) the impairment loss is the difference between the asset’s carrying amount and its recoverable amount. The asset’s recoverable amount is the present value of estimated future cash flows, discounted at the financial instrument’s original effective interest rate.

(2) For financial assets carried at cost because their fair value cannot be reliably measured, the impairment loss is the difference between the asset’s carrying

amount and the present value of estimated future cash flows, discounted at the current market rate of return for a similar financial instrument.

(3) For available for sale financial assets, the impairment loss is the difference between the acquisition cost (net of any principal repayment and amortization) and current fair value (for equity instruments) or recoverable amount (for debt instruments).

(4) Assets at fair value through profit or loss are not subject to impairment testing

, because changes in fair value are automatically recognized immediately in profit or loss.

Example：Ellesmere Co entered into the following transactions during the year ended