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For question 28, why are non-current liabilities measured at amortised cost and not at fair value through profit and loss? they should be measured at FVTPL since convertible bonds contain rights in addition to the repayment of interest and principal( the right to convert the bond to equity). hence, they fail the contractual cash flow characteristic test and cannot be measured at amortised cost. moreover, must both the business model test and cash flow characteristic test be passed to measure an asset or liability at amortised cost?
This is an extract from the IASPLUS website summary of IFRS 9
“Subsequent measurement of financial liabilities
IFRS 9 doesn’t change the basic accounting model for financial liabilities under IAS 39. Two measurement categories continue to exist: FVTPL and amortised cost. Financial liabilities held for trading are measured at FVTPL, and all other financial liabilities are measured at amortised cost unless the fair value option is applied. [IFRS 9, paragraph 4.2.1]”
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