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Chapter 3

4.3 Subsequent treatment of financial assets

Per IAS 39 Financial instruments: Recognition and measurement,
financial assets will be categorised into 4 separate classifications,
with differing accounting treatments.

Candidates must be able to differentiate between the types of FA.

Financial asset Definition Subsequent
classification treatment

Fair value through profit or  Held for trading  Revalue to fair value,
loss (FVPL) (short term)
 Gains/losses to P/L.
or

 Any derivative

Held to maturity (HTM)  Fixed and  Amortised cost
determinable
repayments

 Intention to hold until
maturity date

 Quoted

Loans and receivables  Fixed and  Amortised cost
(LR) determinable
repayments

 Not quoted

Available for sale (AFS)  Any financial asset  Revalue to fair value
that does not meet
the definitions of  Gains/losses to
other categories reserves/OCI

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