Effective Interest Rates

Date recorded:


The IFRIC considered whether future credit losses should be included in determining effective interest rates.


Decision not to add

October 2004



The IFRIC agreed that IFRSs was clear on this issue.  Paragraph 9 of IAS 39 states that when calculating effective interest rate an entity shall not consider future credit losses. Also, IAS 39 Implementation Guidance issue B26 provides further guidance on the matter.


IFRIC reference: IAS 39

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