Disclosure of deferred day 1 profits

On 1 January 2012 Company R purchases financial assets that are not traded in an active market for €15 million which represents their fair value at initial recognition. After initial recognition, R applies a valuation technique to measure the fair value of the financial assets. This valuation technique uses inputs other than data from observable markets. At initial recognition, the same valuation technique would have resulted in an amount of €14 million, which differs from fair value by €1 million. R has only one class of such financial assets with existing differences of €5 million at 1 January 2012. The disclosure in R’s 2013 financial statements would include the following: [IFRS 7.IG14]

Accounting policies

R uses the following valuation technique to measure the fair value of financial instruments that are not traded in an active market: [insert description of technique, not included in this example]. Differences may arise between the fair value at initial recognition (which, in accordance with IFRS 13 and IAS 39 (IFRS 9), is normally the transaction price) and the amount determined at initial recognition using the valuation technique. Any such differences are [description of R’s accounting policy].

In the notes to the financial statements

As discussed in note X, [insert name of valuation technique] is used to measure the fair value of the following financial instruments that are not traded in an active market. However, in accordance with IFRS 13 and IAS 39 (IFRS 9), the fair value of an instrument at inception is normally the transaction price. If the transaction price differs from the amount determined at inception using the valuation technique, that difference is [description of R’s accounting policy].

The differences yet to be recognised in profit or loss are as follows:

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Benefits of our college essay writing service

  • 80+ disciplines

    Buy an essay in any subject you find difficult—we’ll have a specialist in it ready

  • 4-hour deadlines

    Ask for help with your most urgent short tasks—we can complete them in 4 hours!

  • Free revision

    Get your paper revised for free if it doesn’t meet your instructions.

  • 24/7 support

    Contact us anytime if you need help with your essay

  • Custom formatting

    APA, MLA, Chicago—we can use any formatting style you need.

  • Plagiarism check

    Get a paper that’s fully original and checked for plagiarism

What the numbers say?

  • 527
    writers active
  • 9.5 out of 10
    current average quality score
  • 98.40%
    of orders delivered on time