Under IFRS 9, financial assets are classified into three measurement categories based on business model and cash flow characteristics. Which is NOT one of these categories?
AFair Value through Profit or Loss (FVTPL)
BHistorical Cost through Profit or Loss
CAmortised Cost
DFair Value through Other Comprehensive Income (FVOCI)
Explanation
* IFRS 9 classifies financial assets into: 1) Amortised Cost, 2) FVOCI, and 3) FVTPL.
* ‘Historical Cost through Profit or Loss’ is not a valid IFRS classification term.
* Classification depends on the Solely Payments of Principal and Interest (SPPI) test and business model.
Exam Relevance
- Topic: Financial Accounting
- Subtopic: Financial Instruments (IFRS 9)
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