Classification

Financial asset categorised as FVOCI When will a financial asset be categorised as fair value through other comprehensive income? A financial asset shall be measured at fair value through other...

Is there a choice to designate as FVTPL? An entity has choice to designate a financial asset as measured at fair value through profit or loss. Explain. The option to...

Classification of derivative instruments How are derivative instruments classified? Derivative instruments are a subset of financial instruments. In the definition of financial asset, we have the following phrase, viz, “to...

FVOCI (equity instruments) and FVOCI (debt instruments) What is the difference FVOCI (equity instruments) and FVOCI (debt instruments) Debt instruments are classified as FVOCI if and only if both the...

SPPI test & business model objective test Which criteria should be applied first – SPPI test or business model test? SPPI test refers to the evaluation of contractual cash flows...

What does Interest represent? Interest represents only the consideration for the passage of time. Do you agree? While interest is predominantly the consideration for time value of money, it also...

Time value & modified time value What is the difference between time value of money and modified time value of money? Time value of money is the element of interest...

Change in contractual cash flows When change in the terms is altering the contractual cash flows, should the SPPI test be carried out afresh? A proper assessment should be made...

Long-term financial liability classified as FVTPL Can a long-term financial liability be classified as subsequent measured at fair value through profit or loss? Yes. An entity may, on initial recognition,...

Measurement categories for financial assets What are the principal measurement categories for financial assets?  Principal measurement categories for financial assets are amortised cost, fair value through other comprehensive income –...