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Financial instruments

On 1 October 20X2, Laidlaw sold some maturing inventory which had a cost of $4.5 million to a bank for its fair value of $5 million. Under the terms of the sale agreement Laidlaw has the option to repurchase the inventory after a period of ten years at a price of $7.4 million. At this date the fair value of the inventory is expected to be $11 million, and the repurchase price reflects an equivalent annual rate of interest of 4%.

March 3rd 2021 AN ACCA USER

Retagged March 3th 2021

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