IFRS 9 Financial Instruments
Classify eligible debt assets using the business model and contractual cash-flow tests; equity investments and liabilities have their own rules. The expected credit loss model applies to specified instruments, and hedge accounting requires formal designation and qualifying criteria. IAS 32 addresses presentation and liability/equity classification. Detailed examinable depth varies by paper, especially for ECL and hedge accounting.
Worked example
A loan is held to collect principal and interest and meets the contractual cash-flow test. Assuming no relevant election applies, it is classified at amortised cost and assessed for expected credit losses under IFRS 9.
Common mistake
Assuming every financial asset is amortised cost, or applying impairment to an equity investment elected at FVOCI.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |