FRS 4 Capital Instruments
Issued December 1993. Effective for accounting periods ending on or after 22 June 1994. Amended by the issue of FRS 25 in 2004.
FRS 4 has been superseded by FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland for accounting periods beginning on or after 1 January 2015.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:
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.
Last updated 21 June 2015