FRS 4 has been superseded by FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland for accounting periods beginning on or after 1 January 2015. For more information visit:

• icaew.com/newukgaap

Synopsis

FRS 4 provides for the following regarding the issue of debt instruments by an entity.

• Immediately after issue debt should be stated at the amount of the net proceeds.
• The finance cost of the debt should be allocated to periods over the term of the debt at a constant rate on the carrying amount.
• The carrying amount of the debt should be increased by the financial cost for the period and reduced by the amount of interest paid. 
• Gains or losses on the repurchase or early settlement should be included in the profit and loss account in that period.

• Read FRC Summary on FRS 4

Last updated 21 June 2015