Fair value through profit or loss
A financial asset that fails the IFRS 9 tests for amortised cost or fair value through other comprehensive income is generally measured at FVTPL. Certain instruments may be designated at FVTPL when applicable conditions are met. Treatment of transaction costs and particular gains or losses depends on the instrument and applicable IFRS 9 requirements; financial liabilities designated at FVTPL have specific own-credit-risk rules.
Worked example
A share investment classified at FVTPL rises in fair value from $10,000 to $11,500 during the period. Assuming no other relevant movements, the entity recognises a $1,500 fair-value gain in profit or loss.
Common mistake
Assuming all investments at fair value automatically go through OCI, or applying debt-asset SPPI tests to an equity instrument.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |