ACCA AAA ^INT Syllabus D. Audit of Historical Financial Information - Financial assets - Accounting Treatment - Notes ^{13 / 41}

Initially both are measured at FV.

Now let's look at what happens at the year-end..

FVTPL accounting treatment

1. Revalue to FV

2. Difference to I/S

FVTOCI accounting treatment

1. Revalue to FV

2. Difference to OCI

Amortised cost accounting treatment

1. Re-calculate using the amortised cost table

   (see below)

8% 100 receivable loan (effective rate 10% due to a premium on redemption)

Audit procedures on short-term investments

1. Agree the FV of the shares held as investments to stock market share price

2. Confirm the original cost of the investment to cash book and bank statements

3. Discuss the accounting treatment with management and confirm that an adjustment will be made to recognise the shares at fair value

4. Review the notes to the financial statements to ensure that disclosure is sufficient to comply with the requirements of IFRS 9

5. Enquire with the treasury management as to whether there have been any disposals of the original shares held

6. Review board minutes to confirm the authorisation and approval of the amount invested

7. For any investments from which dividends have been received, confirm the number of shares held to supporting documentation such as dividend received certificates