Lynott Limited purchased a five-year bond on 1 January 2015 at a cost of 10,000,000 with annual interest of 5%, which is also the effective rate, payable on 31 December annually. At the reporting date of 31 December 2015 interest has been received as expected and the market rate of interest is now 6%. Requirement (a) Show how the financial asset should be accounted for in the financial statements of Lynott Limited for the year ended 31 December 2015 on the basis that it is classified: (i) as fair value through profit or loss (FVTPL); and (ii) to be measured at amortised cost, on the assumption it passes the necessary tests and has been properly designated at initial recognition. (b) In early 2016, before the 2015 financial statements were finalised, it was identified that the bond issuer was beginning to experience financial difficulties and there was doubt regarding full recovery of the amounts due to Lynott Limited. Following an impairment review, the future cash flows expected by Lynott Limited from the bond issuer are as follows: 31 December 2016 400,000 31 December 2017 400,000 31 December 2018 400,000 31 December 2019 9,200,000 & Assuming all monies due for 2015 were received as expected, and that the carrying value of the financial asset was 10,000,000 before the impairment review, calculate the extent of the impairment of the financial asset to be included in the financial statements of Lynott Limited for the year ending 31 December 2015.- Lynott Limited purchased a five-year bond on 1 January 2015 at a cost of 10,000,000 with annual interest of 5%, which is also the effective rate, payable on 31 December annually. At the reporting date of 31 December 2015 interest has been received as expected and the market rate of interest is now 6%. Requirement (a) Show how the financial asset should be accounted for in the financial statements of Lynott Limited for the year ended 31 December 2015 on the basis that it is classified: (i) as fair value through profit or loss (FVTPL); and (ii) to be measured at amortised cost, on the assumption it passes the necessary tests and has been properly designated at initial recognition. (b) In early 2016, before the 2015 financial statements were finalised, it was identified that the bond issuer was beginning to experience financial difficulties and there was doubt regarding full recovery of the amounts due to Lynott Limited. Following an impairment review, the future cash flows expected by Lynott Limited from the bond issuer are as follows: 31 December 2016 400,000 31 December 2017 400,000 31 December 2018 400,000 31 December 2019 9,200,000 & Assuming all monies due for 2015 were received as expected, and that the carrying value of the financial asset was 10,000,000 before the impairment review, calculate the extent of the impairment of the financial asset to be included in the financial statements of Lynott Limited for the year ending 31 December 2015