Gross Carrying Amount

Definition

Gross Carrying Amount, in the context of IFRS 9 , is the Amortised Cost of a financial asset, before adjusting for any Loss Allowance

Formula

Expressed as a derived measure, the formula for the gross carrying amount simply reflects the fact that it is defined as the amortized cost without the loss allowance deduction

${\mbox{GCA}}_{t}={\mbox{AC}}_{t}+{\mbox{LA}}_{t}$

In terms of cashflows, given a set of expected cashflows ${\textstyle C_{i}}$ (with index running from 1 to n) and a set of discount factors D calculated using the compound Effective Interest Rate over the expected life T of a financial asset, the GCA is obtained as follows:

${\mbox{GCA}}_{t}=\sum _{i=1}^{n}D_{i}(r)C_{i}$

where the discount factor for period (i) is given by

$D_{i}={\frac {1}{(1+r)^{i}}}$

See Also

• Effective Interest Rate

External Links

• IFRS Website

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