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Hello
From my understanding, amortised cost the objective is to hold the asset for cash flows. FVTOCI is to hold the asset for cash flows but also to sell.
Can you please explain:
1.the difference between FVTOCI and FVTPL and the criteria for classification. I read that OCI deals with long term while the other deals with short term
2.accounting mismatch
Thanks
Hi,
1. FVTPL is the default category for financial assets, it is then at the company’s choice as to whether they classify it any differently. FVTOCI is used if the company intends to hold the asset for the long term.
2. You need to be specific as to what it is you don’t understand. I can’t just go through and explain it fully. Quite happy to explain the bits you don’t understand.
Thanks
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