These need to be recognized as “financial liability” and classified as “other financial liabilities”.
Initial recognition
Initially they are measured at fair value plus transaction cost (e.g. legal & documentation expenses). The money received from the bank may be the initial fair value of the loan)
Subsequent measurement
Subsequently they should be measured at amortized cost using the initial effective interest rate (EIR) minus impairment.
EIR is calculated as the Internal Rate of Return (IRR) of the future cash flows of the loan.
Hope this will help you
