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Dear tutor
Would you please confirm the following regarding financial instrument.
Debt assets : 2 models :
Amortised cost & FVTPLEquity instrument: 2 models
FVTPL &FVTOCISo it means that we can not recognised a debt asset under FVTOCI ?
Thank you for your help
And would you please also confirm that :
We have only two models for financial liabilities :
Amortised cost & FVTPL
?Hi,
You are correct on the equity and financial liabilities treatment. The debt asset is either at amortised cost, if it meets the two tests within the model, or FVTOCI, where the business model is to collect the cash flows but sell the asset at some point in the future. We can invoke the fair value option and decide to hold it at FVTPL if it eliminates a mismatch with a similar financial liability.
If you have a look at the following link you should find the specific detail you require under the debt instrument heading.
https://www.iasplus.com/en-us/standards/international/ifrs-en-us/ifrs9
Hope it clears up any confusion.
Thanks
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