Amortised cost

The calculation begins with the initial carrying amount, adds effective interest, deducts cash repayments and adjusts for impairment where applicable. For financial assets IFRS 9 requires both the hold-to-collect business model and contractual cash flows solely of principal and interest for amortised-cost classification. Some sales can be consistent with that model; it is not simply a promise to hold every instrument to maturity. The treatment also applies to relevant financial liabilities, subject to their classification.