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Financial instrument

This topic has 2 replies, 2 voices, and was last updated 2 years ago by Stephen Widberg.

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August 10, 2020 at 11:51 am #579805
arunotes
- Topics: 65
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Dear Sir,

I would like to know about reclassification of FI. may I know can financial asset/financial liability initial classified for AC and then reclassified to FVTOCI??
Also, how about FVTOCI changes to AC??

Thanks sir
August 10, 2020 at 12:27 pm #579808
arunotes
- Topics: 65
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Sir, I have one more question. I would like to ask does it have financial liability for equity instrument? If yes, what are the model available for this?

Thanks sir
August 10, 2020 at 2:26 pm #579827
Stephen Widberg
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Reclassification is only for debt instruments. The company must be changing its business model.

The reclassification would be applied prospectively.

So an instrument previously recognised at amortised cost would be revalued to fair value

Gains or losses would go to OCI.

I find it very hard to imagine a reclassification from FV OCI to amortised cost, but it seems that the fair value at the reclassification date will be used as the new carrying amount on the amortised. cost accounting. Any cumulative gains or losses in a spin OCI will apparently be adjusted against this initial carrying amount……………….. Before you ask I’m not going to make up an example of this would take a week.

Your other question makes no sense at the moment. On the credit side instruments are either liabilities or equity.
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