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Hi,
I have two questions:
1. according to IFRS-9, a bank loan is classified as a financial liability, will this bank loan be measured at amortised cost?
2. in IAS-16, revaluation gains are recorded in OCI and are regarded as unrealised until the asset is sold off and in IAS-40 held at fair value model, any subsequent FV movement is recorded in the P&L, my question is does this FV movement recorded in P&L be regarded as realised or unrealised? because the asset is not yet sold.
Thanks
1. Yes
2. Good question
Revaluation gians on any tangible assets will be regarded as non-realised whether they relate to PPE or to investment properties
On the other hand revaluation gains on financial assets are usually realised
Thanks a lot for the great answers. The reason i asked the second question is that i have seen some tutors when they teach IAS – 40, they say that because the FV movement is recorded in P&L so that it is realised regardless the asset is sold or not and have the misconception that whatever is recorded in P&L is always realised.
Regarding the revaluations gains related to financial assets which are usually realised, does this include both financial assets carried at FVTPL and FVTOCI or just the former?
To some extent the meaning of realised depends on the legal system
In the UK most people would argue that property gains are unrealised ant that investment gains are realised irrespective of whether the investment of how the investments are classified
In SBR they should not really be asking much about realised profits because it’s something that is unique to each country
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