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Dear Tutor,
Hope you are fine and thank you for your nice lectures on financial instrument. I just have 2 short questions and it would be great if you help me!
1- As far as understood from your lectures, you said that financial assets ( investment in debts) can be categorised at amortised cost or (if there is intention to sell) FVTOCI.
But in this article of ACCA ( https://www.accaglobal.com/gb/en/student/exam-support-resources/fundamentals-exams-study-resources/f7/technical-articles/financial-instrument-part2.html) it says that financial assets (investment in debts) can be categorised as amortised cost or FVTPL. I am confused about this matter.2- Should we study impairment loss of financial assets or it is out of F7 syllabus?
Thank you in advance for your reply
Hi,
I’m glad you enjoyed the lectures on financial instruments and I hope you enjoy the remaining ones too. I’ve answered your questions below:
1. The option to categorise at FVTPL is a special rule whereby we are matching the treatment of the financial asset to a similar financial liability. This is more a point related to SBR and so I’d not worry too much about it. You are correct in your explanation above, i.e. amortised cost unless we intend to sell in which case it is FVTOCI.
2. Although impairments are part of IFRS 9 they are not on the syllabus.
Thanks
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