What is the initial measurement for perpetual debt under IFRS 9 and ASPE 3856?

The correct choice for the initial measurement of perpetual debt under both IFRS 9 and ASPE 3856 is fair value based on the present value of interest payments. Under these accounting standards, when a financial liability is initially recognized, it is measured at fair value. For perpetual debt, which does not have a maturity date, the fair value is calculated as the present value of future interest payments that are expected to be made over time.

Calculating the present value of future interest payments involves discounting them back to their present value using an appropriate discount rate, which reflects the market's required yield or interest rate. This measurement reflects the economic reality of the debt instrument, capturing its value at the time of issuance based on future cash flows.

While amortized cost, historical cost, and carrying amount are relevant concepts in the context of financial instruments, they do not apply as directly to the initial measurement of perpetual debt in the same way that fair value based on present value does. Amortized cost and carrying amount pertain more to subsequent measurement after the initial recognition, reflecting how the value changes over time as interest payments are made and any premium or discount is amortized. Historical cost typically refers to the original transaction price and is often less relevant for instruments