Thank you for your answer JaneM.
We need to present value the amount due to Directors since the Directors are financing the Company. Under IFRS for SME - Para 11.13 "If the arrangement constitutes a financing transaction, the entity
shall measure the financial asset or financial liability at the present value of the
future payments discounted at a market rate of interest for a similar debt
instrument as determined at initial recognition".
Since the Company is dormant, the repayment years is undetermined. The only way the Directors can get back the money is when the Company's dispose off their properties. However, the Company has no intention to dispose its properties in the near future.
Hence, we have present value the amount due to Director at zero value. The double entries is as follows:
DR: Amount due To Directors
CR: Other Income - Gain on derecognition of financial liability
Would appreciate if you can give us your comment.