Accounting treatment of loans and receivables:
1, initial measurement
Measured by the sum of fair value and transaction cost.
2. Follow-up measurement
The effective interest rate method is adopted and measured in amortized cost.
Step 3 deal with
At the time of disposal, the difference between the selling price and the book value is included in the current profit and loss.
(1) loan
1. No damage occurred.
(1) Loans issued by financial enterprises
Borrow: loan-principal (principal)
Loan: absorbing deposits, etc.
Loan interest adjustment (difference, possibly on the debit side)
(2) Balance sheet date
Borrow: interest receivable (calculated and determined according to the contract principal and contract interest rate of the loan)
Loan interest adjustment (the difference may also be in the lender)
Loan: Interest income (calculated and determined according to the loan amortized cost and the actual interest rate).
If the contract interest rate is not much different from the actual interest rate, the interest income can also be calculated by using the contract interest rate.
(3) When will the loan be recovered?
Borrow: absorb deposits, etc.
Loan: loan principal
interest receivable
Interest income (difference)
2. Impairment occurs
(1) On the balance sheet date, it is determined that the loan is impaired.
Debit: Asset impairment loss
Loan: loan loss reserve
Meanwhile:
Debit: Loan impairment
Loan: loan (adjustment of principal and interest)
In order to distinguish between normal loans and non-performing loans, when loans are impaired, "loans (principal and interest adjustment)" should be converted into "loan impairment" to facilitate the financial industry to strengthen loan management.
(2) Interest income is recognized on the balance sheet date.
Borrow: loan loss reserve (interest income calculated and determined according to the loan amortized cost and the actual interest rate).
Loan: interest income
At the same time, the interest receivable amount calculated and determined according to the contract principal and interest rate is registered off-balance-sheet.
(3) Recovering the loan
Borrow: absorb deposits, etc.
Loan loss reserve (related loan loss reserve balance)
Loan: The loan is damaged.
Asset impairment loss (difference)
3. For truly irrecoverable loans.
Borrow: loan loss reserve
Loan: The loan is damaged.
4. Loans that have been confirmed for resale will be recovered later.
Debit: Loan impairment
Loan: loan loss reserve
Borrow: absorb deposits, etc.
Loan loss reserve
Loan: The loan is damaged.
Asset impairment loss (difference)
What assets does the enterprise have that are not loans and receivables?
Enterprises should not divide the following non-derivative financial assets into loans and receivables:
(1) Non-derivative financial assets to be sold immediately or recently shall be classified as trading financial assets.
(2) Non-derivative financial assets that are designated at fair value at the time of initial recognition and whose changes are included in current profits and losses.
(3) Non-derivative financial assets designated as available for sale at the time of initial recognition.
(4) For reasons other than the debtor's credit deterioration, it may be difficult for the holder to recover almost all the non-derivative financial assets of the initial investment, such as securities investment funds or similar funds held by enterprises.
Note: The main difference between financial assets classified as loans and receivables and those classified as held-to-maturity investments is that the former is not a financial asset with a quoted price in an active market, and is not subject to more restrictions on sale or reclassification like held-to-maturity investments. If the debt instrument is not quoted in an active market, the enterprise cannot classify it as a held-to-maturity investment.
The main accounting treatment methods of loans and receivables financial assets, Bian Xiao made a detailed arrangement and sharing of this issue from four aspects: value-added, impairment and irrecoverability. I don't know if you can answer this question correctly after learning it. Please pay attention to the update of this website for the accounting treatment methods of other financial assets.