Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Derecognition of financial instruments.
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- May 13, 2018 at 1:16 am #451545
The accounting treatment of derecognition is as follows:
• The difference between the carrying amount of the asset or liability and the amount received or paid for it should be recognised in profit or loss for the period. For investments in equity instruments held at fair value through other comprehensive income, the cumulative gains and losses recognised in other comprehensive income are disposal. not recycled to profit or loss on disposal.
For investments in debt instruments held at fair value through other comprehensive income, the cumulative gains and losses recognised in other comprehensive income are recycled to profit or loss on disposal.What is the logic behind cumulative gain recognised in OCI(OCE) recycling to P&L for debt instruments and not recycling for equity instruments?
May 16, 2018 at 8:40 pm #452329Hi,
You would need to look at the basis of conclusion attached to the standard to find the answer to this one.
Thanks
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