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Is it justifiable if company wants to reclassify their business model to hold to collect and sell, currently they are using hold to collect model.
Based on this information
1) as a result of pandemic there are liquidity crisis and company needs to release cash.
2) credit quality of the issuer of many debt instruments has deteriorated
Is it justifiable or company should continue to use hold to collect business modelReclassification from AC to FVOCI for debt is OK if business model changes.
Source IAS PLUS
All posts are for exam purposes only and the author assumes no liability.
So it can be said that these changes will affect the business model of the company amd it would be fair to reclassify it
You may find the PWC guide useful – around page 19 to 20.
Which exam question is this please?
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