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Debt instruments (other than those wholly repayable or receivable in 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 in one year,
typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of
cash or other consideration, expected to be paid or received. However, if the arrangements of a short-term
instrument constitute a financing transactions, 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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