Page 83 - F2 Integrated Workbook STUDENT 2019
P. 83
Financial instruments
Debt financial assets – Fair value through other comprehensive income
(FVOCI)
Business model test
The entity’s business model is to:
– hold some of the debt, and
– sell some of the debt.
Contractual cash flow test
The cash flows consist of interest and capital receipts only.
Then the debt financial asset is classified as FVOCI.
Subsequent Treatment
Revalue to fair value
Gains or losses go to
equity/OCI
NB. On disposal of FVOCI debt financial assets, the gains or losses held in equity
from revaluing the FVOCI financial asset WILL be reclassified into profit or loss on
disposal.
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