Is there a choice to designate as FVTPL?

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 designate a financial asset at fair value through profit or loss (FVTPL) is not without restrictions. There are certain conditions to be satisfied and above all, the option should be exercised at the inception of the financial asset.

An entity may, at initial recognition irrevocably, designate a financial asset as measured at fair value through profit or loss if doing so eliminates or significantly reduces a measurement or recognition inconsistency (sometimes referred to as an ‘accounting mismatch’) that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases. The option to designate at fair value through profit or loss however is irrevocable.

Designation as fair value through profit or loss is permitted provided that by doing so, it results in the financial statements presenting more relevant information. It should be noted that such a designation can be made only at initial recognition which is not revocable subsequently. The Standard also allows an entity to designate a group of financial instruments which may include financial assets, financial liabilities or both as at fair value through profit or loss provided that doing so results in more relevant information. The decision of an entity to designate a financial asset or financial liability as at fair value through profit or loss is similar to an accounting policy choice. However, unlike an accounting policy choice, it is not required to be applied consistently to all similar transactions.

Ind AS Accounting Standards

Effective Rate of Interest – EIR

What is SPPI test?

Are RBI circulars relevant for ECL computation as per Ind AS 109?

What is a Financial instrument?

What are treasury shares and how are these presented

Contract to deal in non-financial item

Can a corporate entity still follow settlement date accounting?

What does Interest represent?

Gains and losses on assets measured at FVOCI

Separately accounting for an embedded derivative

Derecognition of a financial asset

Foreign currency risk in a firm commitment as a fair value hedge

Treatment of transaction costs

Derecognise financial assets/financial liabilities retrospectively

Modification of contractual cash flows

Own use exemption as per the Accounting Standard

Difference between amortised cost & held-to-maturity

Accounting treatment for FVOCI Instruments

What is the concept of effective interest method?

What is a hybrid contract?

First-time adoption while classifying a financial instrument

SPPI test & business model objective test

Current standards for financial instruments as per AS?

Effective interest Rate

Contract is settled through the entity’s own equity instrument

Financial asset categorised as FVOCI

What is an embedded derivative?

Impairment model for different categories of financial assets

Ind ASs relating to financial instruments

FVOCI (equity instruments) and FVOCI (debt instruments)

Classification of derivative instruments

Contract meant for own use

Reclassification of a financial asset

Debt instrument measured at FVOCI

Change in contractual cash flows

Loss allowance as per Ind AS 109

Ind AS for financial instruments replica of IFRS?

Contractual cash flows & effective interest rate

Long-term financial liability classified as FVTPL

Credit adjusted effective interest rate

Effective rate of interest during the first-time adoption

Consequence of not de-recognising an asset after the sale

Designation of contracts deal a non-financial item on first time adoption

Recognition of financial instruments on first-time adoption

Gains and losses on a financial instrument

Gains and losses from liabilities designated as FVTPL

Measurement categories for financial assets

Difference between time value of money and modified time value of money