CA FINAL FR FINANCIAL INSTRUMENTS TEST YOUR KNOWLEDGE 6 https://resource.cdn.icai.org/67488bos54240-cp12ci.pdf#6#4

My Doubt: Why didn't they discount the fair value of default?

its more apparent in the fair value -3% probability of default
its calculated as ₹1,00,000*3%=30000. It should have been further multiplied by discounting factor at 11% for a year no?
since the default would be at 31/3/2024- one year from 31/3/2023. so ₹100000*3%*0.901=27027.
that would yield closing balance at 27027 instead of 30000
This is how its done in the other sums of this chapter.

They also havent discounted the fair value of previous year but that doesnt effect the answer as much