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IFRS 9 states that there are different ways of measuring a financial asset, which are:
1. Amortised Cost
2. FV through P&L
3. FV through OCI
Can anyone please highlight what is meant by recognizing an asset at amortised cost, at FV through PL and OCI? How do we recognize an asset at FV through P&L? and at OCI?FVTPL is default category, if any investment doesn’t meet criteria of FVTOCI or At Amortized Cost it will fall under FVTPL!
FVTOCI – Investment in equity only, not for trading purpose
Plus the company has made an irrevocable election to recognise gain and losses to OCI
If any of these 2 criteria are not met the investment will be FVTPLAt Amortized Cost – Investment in debt only
Investment can make contractual inflows on regular intervals, both principle and interest
Assess Business management model, their intention should be to invest for long term purposeIf not fulfilled thn FVTPL
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