Revenue recognition for interest on fixed deposit by bank as per ind as 18

Please guide about recognition of Interest on Fixed Deposit/Term Deposit with Banks as per Ind AS 18.

According to IND AS 18 - "Revenue Should be Recognized on the following basis - 

(a) Interest should be recognized by using Effective Interest Rate Method

(b) Royalties should be recognized on an accrual basis according to the substance of relevant agreement"

My query is what is the Effective Rate of Interest for Fixed Deposit and how to compute the same ?

Replies (1)
i think that in case of FD effective rate of interest will be rate of interest on FD. Take yearly interest rate, since interest is compounding quarterly so convert it in effective rate using following formula ((1+R/400)^4)-1.

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