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Hi Mike!
Concerning financial assets; is it a choice that the company has for measuring the FA fair value through P&L or fair value through other comprehensive income.
My issue about this is that what makes a company decides between these 2 options? How would the company know that the FA should be measured fair value through P&L or fair value through other comprehensive income?
It IS a choice for the company to make on the occasion of the acquisition of the first financial asset (I imagine that that decision in practice is left until the occasion of the preparation of the first financial statements after th eacquisition of the first financial assets!)
What factor it is (or are) that makes a company board elect one way or the other … I really do not know!
It’s a most improbable visitor to the F7 exam so I wouldn’t get excited about it … I can’t see the examiner asking a 6 mark question about the factors that persuade a board one way or the other. Can you?
OK?
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