Under this method, the amortization amount of the subsidy cost allowance equals the effective interest minus the nominal interest of the direct loans times the effective interest rate (the discount rate).
The effective interest rate is also called the discount rate.
For example, an audit report on an entity's computerized information systems may contain significant findings that could relate to the attestation engagement if the entity uses such systems to process information about the subject matter or contained in an assertion about the subject matter.