In June 2006, XYZ Co. obtained an interest free loan amounting to USD 50 million from a third party with no fixed repayment terms. Under the terms of the loan agreement, the loan is to be repaid in annual installments, each equal to 60% of XYZ’s annual profit, commencing from the year ended 31 December 2007. The total payments made until 2008 amounted to USD 20 million and the installments due until the current year are classified in the statement of financial position as short-term obligations.
The fair value of the loan is not equivalent …

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