ACCA SBR ^INT Syllabus C. Reporting The Financial Performance Of A Range Of Entities - The Reclassification Of Financial Assets - Notes ^{10 / 14}

Re-classifying between FVTPL, FVTOCI and Amortised cost

1. ONLY if Financial assets business objective changes

2. Do not restate any previously recognised gains / losses

How to Re-classify

• Prospectively from the reclassification date

NEVER RECLASSIFY

1. FVTOCI equity Investments

On derecognition of a financial asset in its entirety, the difference between:

(a) The carrying amount (measured at the date of derecognition); and

(b) The consideration received

is recognised in profit or loss (IFRS 9: para. 3.2.12).

For investments in debt held at fair value through other comprehensive income, on
derecognition, the cumulative revaluation gain or loss previously recognised in other
comprehensive income is reclassified to profit or loss (IFRS 9: para. 5.7.10).

Equity FVTOCI de-recognised

There should be no gain / loss as FV will be up to date (and therefore the same as the amount sold for) and the gains \ losses will already be in OCI

These are NOT reclassified to I/S

Debt FVTOCI de-recognised

The same applies except....

...The cumulative revaluation gain or loss previously recognised in OCI is reclassified to profit or loss