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Amortised cost calculator

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Published: 15 Oct 2019 Reviewed: 23 Nov 2021 Update History

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Technical tool which calculates amortised cost using the effective interest method.


This helpsheet has been issued by ICAEW's Technical Advisory Service to assist ICAEW members in determing the effective rate of interest to be applied and the interest charges to be recognised when holding a financial instrument under the amortised cost model from the borrower's perspective.

Members may also wish to refer to the following related helpsheets:


This amortised cost calculator assumes that the interest on the loan is a market rate, that repayments are made on an annual basis and that the loan term is no longer than 25 years. This calculator works from the borrower's perspective although similar principles apply from a lender's perspective.

Amortised cost calculator

In order to use this calculator, please input the required information into the orange boxes in the tool. Once you have done this, follow the instructions below the orange boxes to determine the effective interest rate. The result will be a table showing the interest to be charged for each year in line with the effective interest method.

A worked example is also presented towards the end of this helpsheet which indicates the accounting entries required.        

If in doubt seek advice

ICAEW members, affiliates, ICAEW students and staff in eligible firms with member firm access can discuss their specific situation with the Technical Advisory Service on +44 (0)1908 248 250 or via webchat.

Terms and conditions

© ICAEW 2023  All rights reserved.

ICAEW cannot accept responsibility for any person acting or refraining to act as a result of any material contained in this helpsheet. This helpsheet is designed to alert members to an important issue of general application. It is not intended to be a definitive statement covering all aspects but is a brief comment on a specific point.

ICAEW members have permission to use and reproduce this helpsheet on the following conditions:

  • This permission is strictly limited to ICAEW members only who are using the helpsheet for guidance only.
  • The helpsheet is to be reproduced for personal, non-commercial use only and is not for re-distribution.

For further details members are invited to telephone the Technical Advisory Service T +44 (0)1908 248250. The Technical Advisory Service comprises the technical enquiries, ethics advice, anti-money laundering and fraud helplines. For further details visit icaew.com/tas.

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Changelog Anchor
  • Update History
    01 Dec 2015 (12: 00 AM GMT)
    First published
    23 Nov 2021 (11: 50 AM GMT)
    Changelog created, helpsheet converted to new template
    23 Nov 2021 (11: 51 AM GMT)
    Helpsheet reviewed, no changes to content.
    16 Mar 2023 (12: 00 AM GMT)
    Repaired and updated links to Leases under FRS 102 and Loans at non-market rates under FRS 102 (the titles of the destination pages have changed). Technical content not reviewed.