Page 33 - PowerPoint Presentation

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

Accounting for investments bases

• Simple share investments

• Simple equity investments are to be measured at fair value in the

statement of financial position, with the fair value changes

recognised in profit or loss (FVTPL – fair value through profit and
loss). The entity has an option to elect to recognise the fair value

changes in other comprehensive income (FVTOCI – fair value
through other comprehensive income) (IFRS 9.5.4.1).

• The FVTOCI election can only be made if the equity investment is

not held for trading; if it is held for trading the fair value

adjustment will be recognised in profit or loss (FVTPL).

• Unquoted equities also have to be measured at fair value (not at

cost). Despite the fair value measurement requirement for all

equity investments, IFRS 9.B5.5 contains guidance on when cost
may be the best estimate of fair value and also when it might not

be representative of fair value.
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