Amortization of bond on IFRS 9 basis

[former_member195434]

Hi,

We want to calculate bond amortization based on effective interest rate method (IFRS 9). I have tried standard amortization procedure 9000 (and also all other methods) but not able to get the amortization calculation as expected. The working of amortization is attached in the attachment screenshot-20191213-073748-word.jpg

Assumptions 1. Nominal value of bond is S100,000

2. Coupon Rate for bond is 6% p.a

3. Coupon Frequency is S/A: Semi Annual

4. YTM is 2.5051%

5. $104,330 is the "clean price" of the bond purchased

There must be a standard way to get this calculation.

Can anyone point out which method is best suited and what settings required.

Regards

Abhi

[former_member195434]

Any help here would be appreciated.

I understand that the discount factor for each future cash flow is (1+r)^(Actual/365) where r = YTM or effective rate if interest and Actual = no of days to maturity for that cash flow.

Is it not possible to use a simple discounted cash flow for determining the NPV (like the NPV formula of excel) rather than using discount factor which is exponential (given above).

Regards

AB