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Hi,
This question might be silly but could you tell why the fair value gain from Investments in equity instruments is not reclassified to P&L on de recognition
In case of debt instruments the same is reclassified to P&L, what causes the difference in treatment of equity & debt instruments?
Hi,
Because the equity instrument is FVTOCI and so gains/losses are not reclassified through profit or loss as the gain has already been recognised in the performance statement.
For the debt then it will be held at FVTPL, so the gain/loss is automatically recognised through profit or loss. Debt has no impact on OCI.
Thanks
Hi,
but in BPP under financial instruments its mentioned that in case of
Debt instrument with the business model to sell/collect contractual cash flows the subsequent measurement is through FV through OCI (And transfer to P&L at the time of disposal/derecognition ), why can’t the same be followed for equity instruments as well?
Also for equity instruments its mentioned as
Equity instruments “not held for trading ” are classified as FV thru OCI (not transferred to P&L on derecognition)
I’m not sure why is there a difference in treatment
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