Impairment and Current Issues

Hi Mike

i have 3 questions. i appreciate your advice please

1) What is the best way to prepare for the current issues question 4? i am trying to master all technical articles on acca website for p2. would this be sufficient for question 4?

2) ifrs 9 impairment. I understand that ifrs 9 impairment does not apply to FVPTL because when we measure the asset at fv each year then we take impairment into account anyways. however i dont understand we do we apply this impairment treatment for asset through FVOCI? how can a bond be designated at FVOCI? i thought FVOCI is only for equity instruments.

3) ifrs 9 says we have 12 month allowance for impairment on initial recognition. so lets say we have a 3 year 10,000 10% bond with effective rate also 10% and 12 month loss allowance is 500

so in year 1 we do the following calculation.

Year 1: 10,000 + 1000 (int charge) – 1000 (int rec) = 10,000 closing bal – 500 (12 month loss allowance) = 9500 carrying amount (this fig goes to sfp)

now lets say we dont have any further information regarding further increase in risks etc

so is the following calculation for year 2 right?

Year 2: 10,000 + 1000 (int charge) – 1000 (int rec) = 10,000 closing bal – 500 (12 month loss allowance) = 9500 carrying amount

do we continue to charge the 12 month allowance 500 in each year or do we only need to charge this once in year 1