Page 89 - F2 Integrated Workbook STUDENT 2019
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Financial instruments
4.4 Derecognition of financial assets
As per IFRS 9 Financial instruments, a financial asset can only be derecognised if:
the contractual rights to the cash flows expire
the RISKS and REWARDS are transferred.
Examinable scenario – factoring
(1) Entity sells receivables
to factor.
(2) Do risk and rewards
transfer to factor? See
next page.
(3) Factor pays entity lump
sum upfront.
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