What is subtracted when calculating the amortised cost for receivables/payables?

When calculating the amortised cost for receivables and payables, cash received or paid is subtracted because it directly impacts the carrying amount of the financial asset or liability. Amortised cost is essentially the amount at which the financial asset or liability is measured at initial recognition minus any principal repayments made plus or minus the cumulative amortisation of any difference between that initial amount and the maturity amount. Therefore, when cash is received for a receivable or paid for a payable, it reduces the total amount outstanding, reflecting the reduction in the asset or liability.

The other options do not represent the elements subtracted from the measurement of amortised cost. Effective interest income refers to the income recognized using the effective interest method but does not represent a cash outflow. The coupon rate pertains to the nominal interest rate on bonds and does not directly affect the calculation of amortised cost for receivables or payables either. Fair value adjustments relate to changes in market conditions affecting the asset or liability but are not subtracted in the amortised cost calculation.