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Financial Instruments

This topic has 1 reply, 2 voices, and was last updated 5 years ago by Stephen Widberg.

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November 18, 2019 at 4:31 am #552950
rishabbohra98
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Sir in lecture video related to financial instruments, it has been stated that debt instruments should initially be measured at FVTOCI unless both the tests are satisfied wherein its then measured at Amortised cost.
However an article in ACCA website states this:
Debt instruments will be classified to be measured and accounted for at FVTPL unless they have been correctly designated to be measured at amortised cost.
So whats the right measurement basis?
November 18, 2019 at 3:44 pm #553004
Stephen Widberg
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All 3 classifications are possible but in most cases FVOCI or amortised cost.
FVPL sometimes used if there is an accounting mismatch – e.g. borrow money to finance investment property where changes in FV of both debt and IP would be in P&L
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