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Debt instruments (other than those wholly repayable or receivable within one year), including loans and
other accounts receivable and payable, are initially measured at present value of the future cash flows
and subsequently at amortised cost using the effective interest rate method. Debt instruments that are
payable or receivable within one year, typically trade payables or receivables, are measured, initially
and subsequently, at the undiscounted amount of the cash or other consideration, expected to be paid
or received. However, if the arrangements of a short-term instrument constitute a financing
transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a
rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the
financial asset or liability is measured, initially, at the present value of the future cash flow discounted
at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
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