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dear sir,
ias 39 requires an embedded derivative to be seperated from its host contract if it fullfills the criterias.ok fair enough.and then suddenly we have ifrs 9 who states that we dun have to seperate the embeded derivative from its host contract.so which is which??who do i follow?in the exam if i were asked to give advice..which do i follow ias 39 or ifrs 9?Aren’t you always supposed to take the derivate element out if the host contract does not contain a financial asset please?
I thought that a derivate element is always taken out of a host contract that does not contain a financial asset and measured at FVTPL if:
– it has different economic characteristics to that of host contract
– a separate instrument with the same characteristics would be treated as derivative
– contract not measured at FVTPL anywayMay I refer you two to pages 589, 590 and 591 of the Kaplan study text (or equivalent) to clear your heads on this. It would take far too long for me to type it in my own words and would (probably) be no clearer than the printed text
Yes, go onto the internet and google search derivatives accounting treatment, IFRS9 and IAS39
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