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HI Sir.
Sorry, available for sale investments, do we account it as per IAS 40 ?? Or IAS 16 ?
i dont understand why they have treated it as per Ias 16. They treat gain on change in Fair value on other reserve account. Is this correct ?
Sir,
which Standards are applicable for investments hold for sale ?Do we go for IAS 40 ? IFRS 5 ?
Its quite challenging me
IFRS 5? IFRS 9?
The numbers aren’t important if that’s what you’re worried about
But Sir,
Neither IFRS 5 nor IFRS 9, allow such a treatment.This is what i have understood. May i have a problem somewhere
IFRS 5, we recognize gain only to the extent of any cumulative imparement loss. Through P&L
IFRS 9-For a financial asset like that we normally done it through profit and loss for any subsequent measurement.
Show them AFTER net operating income but INCLUDE within profit before tax
If they had been held as discontinued operations the gain or loss would be shown AFTER taxation and as part of other comprehensive income
Hello,
I was also confused about this but then I found IAS 39Available-for-sale financial assets (AFS) are any non-derivative financial assets designated on initial recognition as available for sale or any other instruments that are not classified as as (a) loans and receivables, (b) held-to-maturity investments or (c) financial assets at fair value through profit or loss. [IAS 39.9] AFS assets are measured at fair value in the balance sheet. Fair value changes on AFS assets are recognised directly in equity, through the statement of changes in equity, except for interest on AFS assets (which is recognised in income on an effective yield basis), impairment losses and (for interest-bearing AFS debt instruments) foreign exchange gains or losses. The cumulative gain or loss that was recognised in equity is recognised in profit or loss when an available-for-sale financial asset is derecognised. [IAS 39.55(b)]
Since in the question is mentioned that fair value adjustments are recognised in other reserves it got me thinking that maybe the examiner was refering to treatment under IAS 39. Also IFRS 9 will replace the earlier IFRS for financial instruments, IAS 39, when it becomes effective in 2018. Do you think this is correct?
Yes, and that’s why I’m trying to persuade Aloyce to stop worrying about which IAS to follow. I’ve given the guidance about treatment in my post immediately before Miroslava’s post
The question is from December 2009 – that’s some time before IFRS 9 was issued. Your examiner is most unlikely to ask about an out of date IAS where there is a newer IFRS to replace it already in issue.
In the exam, IF a question comes up in this area (big IF – and even then, it’s not going to be more than a couple of marks) follow IFRS 9
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