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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 future cash flows and subsequently at
amortised cost using the effective interest method. Debt instruments that are payable or receivable within one
year, typically trade debtors and creditors, 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 in the case of an out-right short-term loan that is not at market rate, the financial asset or liability is
measured, initially at the present value of cash flows discounted at a market rate of interest for a similar debt
instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small
company, or a public benefit entity concessionary loan.
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