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July 1, 2020 at 2:15 pm
I find it a bit difficult to remember in terms of splitting for equity and debt instruments and then remembering possible classifications. And debt instruments can also be classified as FVTPL, which is seeing pretty often in real life.
Following the two test you’ve mentioned is way easier in my opinion. Business model + SPPI Held to collect + SPPI passed = Amortised cost Held to collect and Sale + SPPI passed = FVTOCI all other combinations (just Sale or models above but SPPI failed) = FVTPL
February 19, 2019 at 8:27 am
When would you classify a financial asset under the initial recognition as fair value through profit and loss?
What is the difference between recognize at fair value incl transaction costs versus fair value through profit and loss as per the notes?
Thank you :-).
May 20, 2019 at 2:39 pm
For equity instruments FVTPL is the default classification. The transaction costs are then expensed through profit or loss.
If it is FVTOCI then the transaction costs are added to the initial FV.
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