- This topic has 1 reply, 2 voices, and was last updated 7 years ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.
OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Financial Instument held at amortised cost
Hey Chris,
Really hope you get around to clear up these last minute questions
I was wondering, tests to hold a financial asset at amortised cost is the business model test and cashflow test
For the business model test, I know that it would not be contradicted if the entity sold its fin. assets when its cashflows got bad
My question is, in what other circumstance would the business model test not be contradicted?
I have a question which mentions that the business may sell its fin.assets if other investments with higher returns become available.
In my opinion, this would invalidate the business model test and hence the asset has to be held at FV through P&L right?
Hi,
The business model is when there is intent to hold the instrument to collect the contractual cash flows. Given that we may not hold it to collect the contractual cash flows then it would not be held at amortised cost.
Thanks