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  • Trade Date & Settlement

    by Vivek on Thursday, November 01, 2018 at 11:50 PM

    Dear Sir, What is meaning of Trade Date and Settlement date as per Financial Instrument Ind-AS ?? 2) What will be the difference in accounting entries & accounting treatment under Trade Date & Settlement date ?? Pls give an example for this. Thanks sir..

    Replied byEditorial Board Saturday, November 17, 2018 at 10:17 AM

    According to Ind AS 109, Financial Instruments, a regular way purchase or sale of financial assets is recognised either using trade date accounting or settlement date accounting. The trade date is the date on which an entity commits itself to purchase or sell a financial asset. The settlement date is the date on which a financial asset is delivered to or by an entity. In case of trade date accounting, an entity recognises or derecognises the financial asset committed to purchase or sell against a liability to pay or receivable from the buyer on the date on which the entity commits to buy or sell the asset. The gains or losses are also recognised where the commitment is a sell commitment.



    In case of settlement date accounting, an entity recognises or derecognises the financial asset when it is received or delivered by the entity. At the same time, liability to pay or receivable from the buyer, as the case may be, and gains or losses (in case of sell) shall also be recognised. However, any change in fair value of the financial asset between the trade date and settlement date is recognised in the profit or loss, if the asset is required to be measured at fair value through profit or loss, or in other comprehensive income, if the asset is required to be measured at fair value through other comprehensive income. If the asset is required to be measured at amortised cost, the change in fair value is not recognised at all.

 
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