I am confused if it is related party transaction which it seems it is then should I apply ASPE 3840 or Financial instruments ASPE 3856 for accounting treatment?
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Looking for advise? Suppose I have a note payable from my mother at 0% interest. What ASPE and IFRS would be applied?
Looking for advise? Suppose I have a note payable from my mother at 0% interest. What ASPE and IFRS would be applied?
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Hi Zeeshan,
While I do not have insight into this specific question, and will leave it up to the community to help, I have found a few resources that might answer your question.
1. If this is a family member to family member transaction, you may wish to see if it would qualify as a "gift" in Canada, and therefore have no real tax implications.
2. Related Party loans at below market value interest rates are covered in this article: https://www.grantthornton.global/globalassets/1.-member-firms/global/insights/article-pdfs/ifrs/ifrs-viewpoint-1---related-party-loans-at-below-market-interest-rates.pdf
3. Tax tips about making loans to your family from BDO Canada: https://www.bdo.ca/en-ca/insights/tax/weekly-tax-tips/family-loans-at-prescribed-rates-of-interest/#:~:text=The%20prescribed%20rate%20is%20an,for%20the%20rest%20of%202019.
Hopefully someone in the community can shed some more light.