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Hi Tutor,
Assume that a company has a financial liability (i.e. bond held for trading) measured at FVTPL, and there is a $1,000 fair value change relating to own risk before the bond is transferred:
1) Is the FV change of $1,000 taken to OCE?
2) If so, is the balance of $1,000 reclassified to P/L, or directly to retained earnings?Many thanks!
Best regards,
KennyIf it relates to credit risk, we would credit OCI not P&L.
I’ve never thought about recycling – but I looked it up and……………………….. no recycling.
🙂
Hi Stephen,
Noted with thanks Stephen!
Yeah, I searched online again also, it is held in other components of equity (OCE) under a reserve account called fair value reserve.
Kaplan study material is really disappointing, in this particular area of incompleteness it is like watching a movie for few hours and it does not have an ending, not to mention errors/mistakes, examples incompleteness and using all these smart words which are really unnecessary. Rushing for exam, if not, will summarise all errors/issues and file a formal complaint to both Kaplan and ACCA.
Best regards,
KennyThanks Stephen!
Will try my best to. Taking SBR and AFM together and 100% self-study, so a bit stress.
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