UK Loan at off market rate

Joined
Feb 14, 2024
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United Kingdom
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.
 

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