Average coupon rate used to calcuate carrying amount of a 5-yrs-bonds portfolio
I have come across a problem relating to IAS 32/39 (IFRS 7) on the carrying amount computation of a 5-yrs-bonds portfolio.
This is a debt instrument classified under financial liabilities categories of Fair Value through Profit or Loss.
In order to determine the recoverable amount i.e. the Present Value. I discount the estimated cash flows [(Principal + accrued interests) x AER x (months to maturity/12] at the bonds' original coupon rate. ( we have a portfolio of bonds with different coupon rates and months to maturity but they are all 5-yrs-bonds)
Here comes to the question: Can I use an industry average annual coupon rate of a 5-yrs-bond for the whole portfolio of my 5-yrs-bonds (over 20 some) ? because if each individual coupon rate is used, I would lose track of my "months to maturity data" and make the spreadsheet unbelievably complex, and It would be even harder to spot any errors.
My worry is that the auditor may pick this up and say that it is a best practice to use each rates. Even the standards didn't specify this explicitly.
I am asking here that are there any supporting claims ( from the standards or those reputable sources) to allow my way of calculation ? i also believe, using average coupon rate does not constitute to materiality issues here. Correct ? Or Have i got it wrong completely ?
Many thanks for your prompt responses !
- Vat treatment of charity business income 62 4
- Donations (to a school!) 418 11
- Company Accounts 63 1
- Vat on Royalites 76 1
- 100% Xero practice 2,106 34
- Any Scottish members out there? 9,153 341
- where has the honest passion to help gone..??? 830 17
- Umbrella Company 131 2
- Outsourcing iXBRL Tagging 422 24
- Payroll YTD info on Operaii 74 1
- Treatment of goodwill in Consolidation 141 5
- Mortgage deposit Gift 422 18
- Profitable company wanting to buy an office 160 3
- property rental income split 254 3
- Shadow director or alternative? 466 4
- Does my client qualify for CGT Loss? 124 1
- EIS/SEIS capital gains exemption 93 2
- About to buy a block of fees. Any advice? 1,266 5
- Use of home for storage 325 6
- VAT registration for self employed dentist??? 324 10
- Raiders of the Lost Tax File 1,185
- Chartered Accountant in County Down N.Ireland 403
- IPP (International Pension Plan) income 314
- National Insurance 308
- valuation of intangible asset FRS10 and FRS20 260
- Cass 5 FCA Client Money Software recomendation 233
- Unnecessary S9A Enquiries 232
- Non Resident 218
- Franchise income and costs 201
- A question for the payroll-only bureau's out there 147