AASB 139 - Financial Instruments: Recognition and Measurement - July 2004
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IE27 During the third month there is no further change in the amount of assets or liabilities in the three-month time period. On 31 March 20x1 the assets and the swap mature and all balances are recognised in profit or loss.
IE28 Entity A makes the following accounting entries relating to this time period:
Dr Cash CU8,071,707
Cr Asset (statement of financial position) CU8,000,000
Cr Profit or loss (interest income) CU71,707
To recognise the interest and cash received on maturity of the hedged amount (CU8 million).
Dr Profit or loss (interest expense) CU71,707
Cr Profit or loss (interest income) CU62,115
Cr Cash CU9,592
To recognise the interest received and paid on the portion of the swap designated as the hedging instrument (CU8 million).
Dr Derivative liability CU9,518
Cr Profit or loss (gain) CU9,518
To recognise the expiry of the portion of the swap designated as the hedging instrument (CU8 million).
Dr Profit or loss (loss) CU9,518
Cr Separate line item in the
statement of financial position CU9,518
To remove the remaining line item balance on expiry of the time period.
IE29 The net effect on profit or loss (excluding interest income and interest expense) is nil reflecting that the hedge is fully effective.
IE30 Entity A makes the following accounting entry to amortise the line item balance for this time period:
Dr Profit or loss (loss) CU11,377
Cr Separate line item in the
statement of financial position CU11,377[15]
To recognise the amortisation charge for the period.