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Hello Mr. Widberg,
I noticed that reclassification of financial assets topic is covered VERY briefly in the Kaplan study text and there’s no separate OT lecture on it as well though I haven’t taken the lecture yet because I like to read the text before taking a lecture because it helps me understand and retain things better.
I then checked the syllabus and in section 11. 3(d) it says “Discuss and apply the reclassification of financial assets” so I’m worried the text might not be enough and also wondering to what extent it is tested.
I just need to be mindful of it even if I go into its details some time later.
Your insight as always would be valued 🙂
Source of below is IAS plus (Deloitte) – most students would not be aware of it, but it should give you peace of mind. 🙂
“For financial assets, reclassification is required between FVTPL, FVTOCI and amortised cost, if and only if the entity’s business model objective for its financial assets changes so its previous model assessment would no longer apply. [IFRS 9, paragraph 4.4.1]
If reclassification is appropriate, it must be done prospectively from the reclassification date which is defined as the first day of the first reporting period following the change in business model. An entity does not restate any previously recognised gains, losses, or interest.
IFRS 9 does not allow reclassification for equity investments measured at FVTOCI”
Thank you sir. One last thing. How important is the topic? Do I need to go into much detail like what amount do we have to remeasure it and the treatment?
E.g I do know that when an asset is reclassified from FVOCI to Amortized Cost – FV at the date is taken as the CV and the cumulative OCI balance is adjusted against that amount….
but do I have to worry much about it? I mean I can revise/learn the treatment for all possible transfers…. but I need to stay exam focused (not that it would be much trouble)
Forgive me if I give the impression of being a little too clever. I’m not, I just switched to the ACCA a few months back from another professional body and I’m just confirming things.
There are endless possibilities, and, in the event that one came up in the exam, it would be for very few marks, so it’s not worth worrying.
The exam aims to test the basics of everything. No one has ever scored 100%, so be calm.
Our notes plus your up to date revision kit…………….and you will be fine.
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