Compound Financial Liabilties are those instruments which has the features of both financial and equity instruments, thus it needs to be recognised and measured after allocation of the components to its financial and equity component. Financial component is identified by discounting all the expected repayments at the market rate and equity component is the balance portion of the total proceeds. Afterwards, the recognition and measurement is done as per ACM method as explained in earlier blogs related to initial measurement and recognition and subsequent measurement and recognition . In ACM method for financial liabilities, for initial recognition we obtain the fair value which in this case is the PV of all the expected repayments at market rates, then we reduce the transaction cost associated thereto. Subsequently, we recognise it in the carrying value being the amortised cost; amortised at the EIR which will be same as market rates where there is no transa...