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Hello, sir. Regarding the investment in equity instrument for financial asset, the subsequent measurement is at FVTOCI. But during the derecognition, we don’t have to reclassify to SOPL like the derecognition for debt instrument. Why does equity instrument stay in OCI?
@nasuhafardzi said:
Hello, sir. Regarding the investment in equity instrument for financial asset, the subsequent measurement is at FVTOCI. But during the derecognition, we don’t have to reclassify to SOPL like the derecognition for debt instrument. Why does equity instrument stay in OCI?Great question. I think the standard writers wanted consistency between equity instruments and other long term assets such as PPE. So gains stay in reserves are are not recycled into the P&L statement.
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