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Dear Tutor,
According to this article on ACCA website :
the gain and loss on FVTOCI is NOT reclassified to P&L when the asset is derecognised.
But in paragraph 5.7.10 of IFRS 9 (and also paragraph 55.b IAS 39 about available for sale which is the same as FVTOCI in IFRS 9) it is saying that the gain or loss should be reclassified to P&L!!!!
There is also an example in ACCA website (for IAS 39) that it seems the gain is reclassified : https://www.accaglobal.com/lk/en/member/discover/cpd-articles/corporate-reporting/ias39-instruments.htmlWhich one is correct? We should reclassified or not??
Thank you very much with your help in advance
Hi,
IAS 39 and AFS no longer exists so we are using IFRS 9, and the key here is that it talks about the reclassification to profit or loss as a reclasification adjustment per IAS 1. Effectively this means that we are doing a reserve transfer in the SOCE and not recycling from OCI to P/L in the SPLOCI.
Hope that clears up the issue.
Thanks
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