What is a hybrid contract?

What is meant by a hybrid contract?

A hybrid contact is one that includes a non-derivative host and an embedded portion. An embedded derivative is a component of a hybrid contract. The cash flows of the hybrid instrument that is combined instrument vary in a way similar to a standalone derivative.

What is an embedded derivative?

What is an embedded derivative? What is an embedded derivative? An embedded derivative causes some or all of the cash flows that otherwise would be required by the contract to be modified according to a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit …
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Separately accounting for an embedded derivative

Separately accounting for an embedded derivative Should an embedded derivative contained in a financial liability be separated and accounted for? When a hybrid contract contains a host contract and it is not a financial asset, the embedded derivatives portion should be separated from the host and accounted for as a derivative if …
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Reclassification of a financial asset

Reclassification of a financial asset When should a financial asset be reclassified? When, and only when, an entity changes its business model for managing financial assets it shall reclassify all affected financial assets to reflect the appropriate category. An entity should reclassify financial assets if the entity changes its business model for managing …
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Gains and losses on a financial instrument

Gains and losses on a financial instrument How are gains and losses on a financial instrument be measured? A gain or loss on a financial asset or financial liability that is measured at fair value should be recognised in profit or loss account. For an investment in equity instrument, which the entity …
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Gains and losses from liabilities designated as FVTPL

Gains and losses from liabilities designated as FVTPL How are the gains and losses from liabilities designated as at fair value through profit or loss account recognised? An entity shall present a gain or loss on a financial liability that is designated as at fair value through profit or loss as follows: The …
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Gains and losses on assets measured at FVOCI

Gains and losses on assets measured at FVOCI How are gains and losses on assets measured at fair value through other comprehensive income recognised? A gain or loss on a financial asset measured at fair value through other comprehensive income shall be recognised in other comprehensive income, except for impairment gains or …
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