Icaew diploma in ifrss

ICAEW\DIPLOMA IN IFRSs Page
10 of 13
2(a)
Financial instruments An entity had the following transactions during the year ended 31 December 2010:
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The entity invested in a convertible bond on its issue date. The bond matures four years after the issue date and at that date the bond can be converted into ordinary shares of the investee or repaid at par. The entity's plan for the bond is to hold it until it matures and collect the cash flows.
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The entity entered into a contractual commitment to make a variable rate loan to a customer beginning on 1 January 2011 fora fixed period at 1% less than the rate at which the entity (not the customer) can borrow money.
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The entity sold to a third party the right to receive the interest cash flows on a fixed maturity debt instrument it holds and will continue to legally own up to the date of maturity. The debt instrument is quoted in an active stock market. The entity has no obligation to compensate the third party for any cash flows not received.

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