IAS 32, IAS 39, IFRS 4 and IFRS 7 - Nelson CPA · 2007. 7. 20. · (see IFRS 3) for the acquirer only U. 7 Scope – Excluded from IAS 32 and 39 Example 1 1. Tony buys a 6-month future

1

IAS 32 IAS 39 IFRS 4 and IFRS 7(Morning Session) 21 July 2007

copy 2005-07 Nelson 1

Nelson LamNelson Lam 林智遠林智遠MBA MSc BBA ACA CFA CPA(Aust) CPA(US) FCCA FCPA(Practising) MSCA

IAS 32 IAS 39 IFRS 4 and IFRS 7

Anyone who says they understand IAS 39 has not read it helliphellip

Professor Sir David TweedieChairman of IASB


2

IAS 32 rArr Financial Instruments Presentation


IAS 39 rArr Financial Instruments Recognition and measurement

IFRS 7 rArr Financial Instruments Disclosure ndash The most interesting standardsndash The most lengthiest standardsndash The most complex standardsndash Cover some unusual or more complex contracts


pndash But also cover some very simple elements in the

financial statements for examplebull Cash trade receivable helliphellipbull Share capital trade payable bank loans helliphellip

IFRS 4 rArr Insurance Contracts

Objectives

IAS 32bull Aims at enhancing financial

statement usersrsquo understanding

IAS 39bull Aims at establishing principles

for recognising and measuringstatement users understanding of the significance of financial instruments to an entityrsquos financial position performance and cash flows

bull Contains requirements for the presentation of financial instruments and

for recognising and measuringfinancial assets financial liabilities and some contracts to buy or sell non-financial items


identifies the information that should be disclosed about them

Before IFRS 7 effective in 2007

IFRS 4bull Specifies the financial reporting for insurance contracts by any entity

that issues such contracts

3

Main Coverage

IAS 32 IAS 39bull Presentation

Li biliti d E itbull Classification of financial

i t tndash Liabilities and Equityndash Compound Financial Instrumentsndash Offsetting

bull Disclosure requirements

instrumentsbull Recognition and derecognition of

financial instrumentsbull Measurement of financial

instrumentsbull Derivatives and embedded

derivativesbull Hedging and hedge accountingIFRS 7


bull Hedging and hedge accountingIFRS 7bull Disclosure requirements

IFRS 4bull Limited improvementsbull Disclosure requirements

ImplicationImplication

Implication of IAS 39 and IFRS 4

China Life Insurance Company Limited

Case 1

A ti t 2005ndash The adoption of HKAS 39 resulted in

bull a change in the accounting policy relating to the classification of financial assets at fair value through income and available-for-sale securities

bull but no change in equity at 1 January 2005 helliphellip

ndash The adoption of HKFRS 4 has resulted in bull a change in the classification of insurance contracts and investment contracts

HKFRS 4 applies to

bull Accounting report 2005 (1st year in adopting HKAS 39 amp HKFRS 4)


ndash HKFRS 4 applies to i) all direct and assumed risk insurance contracts (ldquoinsurance contractsrdquo) andii) all investment contracts with a discretionary participation feature (ldquoinvestment

contracts with DPFrdquo) of the Group

ndash All other contracts (ldquoinvestment contracts without DPFrdquo) of the Group fall into the scope of HKAS 39 helliphellip

4

Implication of IAS 39 and IFRS 4Case 1

China Life Insurance Company LimitedA ti t 2005ndash The Group issues contracts that transfer insurance risk or financial risk or both

bull Insurance contracts are those contracts that transfer significant insurance risk They may also transfer financial risk

bull Investment contracts are those contracts that transfer financial risk with no significant insurance risk

bull A number of insurance and investment contracts contain a DPF (Discretionary Participation Feature) This feature entitles the holder to receive as a supplement to b fit d th t t dditi l b fit b th t t l t i t



benefits under the contracts additional benefits or bonuses that are at least in part discretionary to the Group

ndash Insurance contracts and investment contracts with DPF are classified into three main categories

i) Short-term insurance contracts hellipii) Long-term traditional insurance contracts helliphellipiii)Long-term investment type insurance contracts and investment contracts with DPF


China Life Insurance Company LimitedA ti t 2005ndash Long-term investment type insurance contracts include

bull life insurance and annuity contracts with significant investment features but with sufficiently significant insurance risk to still be considered insurance contracts under HKFRS 4

ndash During 2005 HKFRS 4 was adopted ndash HKFRS 4 permits the existing accounting policies to be applied to all

contracts deemed to be insurance contracts under HKFRS 4 helliphellip




5

Morning Session

Todayrsquos AgendaSimple but

Comprehensive

Contentious and k i

Afternoon Session

key issues

Real Life Cases and Examples

bull Financial Instruments Recognition and Measurement (IAS 39)

bull Derivative (IAS 39)

bull Insurance Contracts (IFRS 4)


bull Derecognition (IAS 39)

bull Hedging (IAS 39)

bull Financial Instruments Presentation (IAS 32)

bull Financial Instruments Disclosure (IFRS 7)

Morning Session

Todayrsquos Agenda ndash Morning

bull Financial Instruments

Scope Scope

Initial Recognition

bull Extended the scope to all contract to buy and sell of non-financial items that meet the scope

bull All financial instruments including derivatives are recognised in the balance sheet (on balance sheet)

Definitions bull Financial instruments including derivatives

are clearly defined


Measurement

balance sheet)

bull Except for strict conditions are fulfilled all financial assets are measured at fair value

Derivatives bull More explanation on derivatives and backdrop of hedging

6


Morning Session

Scope Scope


Scope ndash Excluded from IAS 32 and 39IAS 39

Interests in subsidiaries associates and joint ventures accounted for under IAS 27 28 and 31Ri h d bli i d l hi h IAS 1 li

IAS 32

IAS 39


IFRS 7

Rights and obligations under leases to which IAS 17 applies except for derecognition and embedded derivativesEmployersrsquo rights and obligations under employee benefit plans to which IAS 19 appliesFinancial instruments issued by the entity that meet the definition of an equity instrument in IAS 32Rights and obligations under an insurance contract as defined in IFRS 4 except for embedded derivativesContracts for contingent consideration in a business combination



(see IFRS 3) for the acquirer onlyContracts between an acquirer and a vendor in a business combination to buy or sell an acquiree at a future dateCertain loan commitments (IAS 37 and 18)Instruments and obligations under share-based payment transactions (IFRS 2) except for some contractsRights to payment to reimburse a recognised provision under IAS 37


7

Scope ndash Excluded from IAS 32 and 39Example 1

1 Tony buys a 6-month future contract in oil with a bank over the counter and Tony uses it to hedge with the oil that it would buy in 6 months for his factory

2 Tony also signs a contract to buy oil from a US oil


2 Tony also signs a contract to buy oil from a US oil company and the oil company promises to deliver the oil in 3 months

Are these two contracts within the scope of IAS 39

Scope ndash Excluded from IAS 32 and 39

Contracts to buy or sell a non-financial item can be divided into 2 types1 that can be settled Forward contracts1 that can be settled

bull net in cash or another financialinstrument or

bull by exchanging financial instruments

2 that were entered into and continue tobe heldbull for the purpose of the receipt or

bull as if financial instrumentsbull within scope

U l


p p pdelivery of a non-financial item

bull in accordance with the entityrsquos expected purchase sale or usage requirements

Usual executory contractsbull NOT within scope

8


Morning Session

Definitions


A financial instrument is any contract that gives rise to1 a financial asset of one entity and2 a financial liability or equity instrument of another equity

Definitions and Classification

2 a financial liability or equity instrument of another equity


Financial instrument

Financial asset

Financial liability

Equity instrumentor

of one entity

of another entity

9

Definitions ndash Financial Instruments Financial asset is any asset that isbull Cashbull An equity instrument of another entitybull A contractual rightA contractual right

i) to receive cash or another financial asset from another entityii) to exchange financial assets or financial liabilities with another entity under

conditions that are potentially favourable to the entitybull A contract that will or may settled in the entityrsquos own equity instruments and is

i) a non-derivative for which the entity is or may be obliged to receive a variable number of the entityrsquos own equity instruments or

ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entityrsquos own equity instruments (For this purpose the entityrsquos own equity instruments do not



Financial asset

Financial liability

Equity instrumentor

own equity instruments (For this purpose the entityrsquos own equity instruments do not include instruments that are themselves contracts for the future receipt or delivery of the entityrsquos own equity instruments)

Derivative

Definitions ndash Financial Instruments Financial liability is any liability that is bull A contractual right

i) to deliver cash or another financial asset from another entityii) h fi i l fi i l li bili i i h hii) to exchange financial assets or financial liabilities with another

entity under conditions that are potentially unfavourable to the entitybull A contract that will or may settled in the entityrsquos own equity instruments and is

i) a non-derivative for which the entity is or may be obliged to deliver a variable number of the entityrsquos own equity instruments or

ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entityrsquos own equity instruments (For this purpose the entityrsquos own equity instruments do not include instruments that are themselves contracts for the future receipt or delivery of the


DerivativeDerivativeFinancial

instrument

Financial asset

Financial liability

Equity instrumentor

include instruments that are themselves contracts for the future receipt or delivery of the entityrsquos own equity instruments)

10

Definitions ndash Financial Instruments Equity instruments rArr is any contract that evidences a residual interest in

the assets of an entity after deducting all of its liabilities


Equity instrument


Financial asset

Financial liability or

Derivative

Definitions ndash Financial Instruments Example 2

Gold Bullionbull Is gold bullion a financial instrument (like cash) or is it a commodityg ( ) y

It is a commoditybull Bullion is highly liquidbull But there is no contractual right to receive cash or another financial

asset inherent in bullion


Equity instrument


Financial asset


Derivative

11



Financial asset

Financial liability



1 Financial assets at fair value through profit or loss

FA at FV through PL

AFS fi i l

Loans and receivables


Financial asset

Financial liability

2 Available-for-sale financial assets

3 Held-to-maturity investments

4 Loans and receivables

HTM investments

AFS financial assets


bull Initial recognition and measurement principle for financial assets and financial liabilities are the same (to be discussed later)

bull But IAS 39 further defines financial asset into 4 categories for subsequent measurement (financial liability to be discussed later)

The 4-category classification will affect the subsequent measurementof financial assets but not the initial measurement

12

A financial asset that meets either of the following 2 conditions

Definition ndash for Financial Assets at Fair Value through PLFA at FV through PL


conditionsa) It is classified as held for trading if it is

i) acquired or incurred principally for the purposeof selling or repurchasing it in the near term

ii) part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking or

An entity has NO choice


iii) a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument)

b) Upon initial recognition it is designated by the entity as at fair value through profit or loss (only if the entity meets any one of the conditions in IAS 39)

If an entity meets the condition it has a choice (since 2006)

Definitions and ClassificationDerivativeHeld for trading (or

derivative)

Upon initial recognition designated at FA at FV

through PL

Yes

NoYes

Designated and effective hedging

instrumentNo

YesA Financial Asset

No

Yes


through PL


through PL (if allowed)

Requirements imposed in 2006ndash The Fair Value Option (Jul 2005)

Hedge Accounting

bull Restrict a companyrsquos option in designating a financial asset (or financial liability) at FV through PL


FA at FV through PL

bull Only allow to designate if conditions are met

3 Conditions to Designate

13


Effective from 112006 Upon initial recognition an i d i fi i l fi i l li bili


entity may designate a financial asset or financial liability as at fair value through profit or loss onlybull when permitted by paragraph 11A of IAS 39 (in order

to avoid separation of embedded derivative from hybrid contract) or

bull when doing so results in more relevant information because eitheri) it eliminates or significantly reduces a

1 Embedded Derivative Condition

2 Eliminates Inconsistency


measurement or recognition inconsistencyii) financial assets financial liabilities or both is

managed and its performance is evaluated on a fair value basis


3 Managed on Fair Value Basis


bull Accounting report 2006

Case 2

Securities designated at fair value through profit or loss ndash Securities designated at fair value through profit or loss are financial

instruments which on initial recognition are designated by the group as being at fair value through profit or loss

ndash A security is classified in this category if it meets the criteria set out below and is so designated by management

ndash The group designates securities at fair value through profit or loss because the

g p


The group designates securities at fair value through profit or loss because the designation1) eliminates or significantly reduces a measurement or recognition

inconsistency that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases or

14



Case 2

2) applies to a group of financial assets financial liabilities or both that is managed and its performance evaluated on a fair value basis in accordance with the grouprsquos documented risk management or investment strategy and where information about these instruments are provided internally on that basis to the grouprsquos key management personnel or

3) relates to securities containing one or more embedded derivatives which

g p

Securities designated at fair value through profit or loss


3) relates to securities containing one or more embedded derivatives which significantly modify the cash flows resulting from the securities and which would otherwise require separate accounting

ndash Financial assets and financial liabilities so designated are recognised initially at fair value with transaction costs taken directly to the income statement

ndash Gains and losses from changes in the fair value of such assets and liabilities are recognised in the income statement as they arise

bull Those non-derivative financial assets that are designated as available for sale or


Definitions and ClassificationFA at FV

through PLDefinition ndash for Available-for-sale financial assets

as available for sale orbull Those not classified into other categoriesbull Implies

rArr Except for those held for trading all the remaining financial assets can be designated as AFS financial assets

rArr Loans and receivables and HTM investments can also be initially designated as AFS financial assets

An entity has a choice


be initially designated as AFS financial assets

15

HTM investments

bull Non-derivative financial assets with fixed or determinable


through PLDefinitionAFS financial

assets for Held-to-Maturity Investments

payments and fixed maturitybull That the entity has the positive intention and ability to hold to

maturity other thanndash those initially designated as FA at FV through PLndash those designated as AFS financial assetsndash those that meet the definition of loans and receivables

A d bt i t t ith i bl i t t t ti f th it i f


bull A debt instrument with a variable interest rate can satisfy the criteria for a HTM investment

bull Equity instruments cannot be HTM investments eitherndash because they have an indefinite life (such as ordinary shares) orndash because the amounts the holder may receive can vary in a manner that is

not predetermined (such as for share options warrants and similar rights)

Definitions and ClassificationExample 3

HTM investments

Definitionfor Held-to-Maturity Investments

ABC Co buys the following listed notes and intends to hold them to maturity

ndash 5 5-Year note

ndash HIBOR 3-Year bank note

ndash 10 1-year equity-linked note(at maturity ABC co can receive either

i i l ith i t t HSBC h if

rArr radic HTM investments


rArr radic but the put option element shall be separated and

t d f


principal with interest or HSBC shares if the price of HSBC shares falls below $150 each)

accounted for asEmbedded Derivative (to be discussed)

16


Bond with index-linked interest

HTM investments


bull Entity A buys a bond with a fixed payment at maturity and a fixed maturity date

bull The bondrsquos interest payments are indexed to the price of a commodity or equity

bull Entity A has positive intention and ability to hold the bond to maturitybull Can Entity A classify the bond as a HTM investment


Yesbull However the commodity-indexed or equity-indexed interest payments

result in an Embedded Derivative that is separated and accounted for as a derivative at fair value


Callable bond

HTM investments


Callable bondbull Entity A buys a callable bond and the bond issuer has a call optionbull Can Entity A classify the bond as a HTM investment

Yesbull If the holder intends and is able to hold it until it is called or until

maturity and the holder would recover substantially all of its carrying t


amountbull The call option of the issuer if exercised simply accelerates the

assetrsquos maturity

17


Puttable bond

HTM investments


Puttable bondbull Entity A buys a puttable bond and Entity A has a put option to require

the issuer to redeem the bondbull Can Entity A classify the bond as a HTM investment

Nobull A financial asset that is puttable (ie the holder has the right to

i th t th i d th fi i l t b f


require that the issuer repay or redeem the financial asset before maturity) cannot be classified as a HTM investment

bull Because paying for a put feature in a financial asset is inconsistent with expressing an intention to hold the financial asset until maturity

An entity shall not classify any financial assets as held to maturity

Definitions and ClassificationHTM

investmentsDefinitionfor Held-to-Maturity Investments

Subject toTainting Rule below

y y y yndash if the entity has

bull during the current financial year orbull during the two preceding financial yearsbull sold or reclassified more than an insignificant amount of held-to-

maturity investments before maturity(more than insignificant in relation to the total amount of held-to-maturity investments)

The sales or reclassifications are exempted from the above Tainting Rule if they


The sales or reclassifications are exempted from the above Tainting Rule if theyndash are so close to maturity or the financial assetrsquos call date (for example less than 3

months before maturity) that changes in the market rate of interest would not have a significant effect on the financial assetrsquos fair value

ndash occur after the entity has collected substantially all of the financial assetrsquos original principal through scheduled payments or prepayments or

ndash are attributable to an isolated event that is beyond the entitys control is non-recurring and could not have been reasonably anticipated by the entity

18


Sale of HTM investments

HTM investments



Sale of HTM investmentsbull Entity A sells $1000 bonds from its HTM portfolio with $5000 bonds

on interim date of 2003 before the bonds will be matured in 2007bull Since Entity A wants to realise the appreciation in market price of the

bonds

bull The disposed bonds would be over an insignificant amount of the whole portfolio and it is not an exemption from Tainting Rule


p p gbull The sale of part of the HTM portfolio ldquotaintsrdquo that the entire portfolio

and all remaining investments in the HTM category must be reclassified

bull Entity A will be prohibited from classifying any assets as HTM investments for 2 full financial years until the year of 2006


Downgrade of Credit Rating

HTM investments



Downgrade of Credit Rating Would a sale of a held-to-maturity investment following a downgrade of the issuerrsquos credit rating by a rating agency raise a question about the entityrsquos intention to hold other investments to maturity

Not necessarilybull A downgrade is likely to indicate a decline in the issuerrsquos creditworthinessbull IAS 39 specifies that a sale due to a significant deterioration in the issuerrsquos

creditworthiness could satisfy the condition in IAS 39 and therefore not raise


creditworthiness could satisfy the condition in IAS 39 and therefore not raise a question about the entityrsquos intention to hold other investments to maturity

bull However the deterioration in creditworthiness must be significant judged by reference to the credit rating at initial recognition

bull Also the rating downgrade must not have been reasonably anticipated when the entity classified the investment as held to maturity in order to meet the condition in IAS 39

19


Different categories of HTM Investments

HTM investments



Different categories of HTM InvestmentsCan an entity apply the Tainting Rule for held-to-maturity classification separately to different categories of HTM investments such asndash debt instruments denominated in US dollars andndash debt instruments denominated in Euro

Nobull The Tainting Rule is clear


bull The Tainting Rule is clearif an entity has sold or reclassified more than an insignificant amount of HTM investments it cannot classify any financial assets as HTM investments


Different entities in a group

HTM investments



Different entities in a groupCan an entity apply the Tainting Rule separately to HTM investments held by different entities in a consolidated group for example if those group entities are in different countries with different legal or economic environments

Nobull If an entity has sold or reclassified more than an insignificant amount


bull If an entity has sold or reclassified more than an insignificant amount of investments classified as held-to-maturity in the consolidated financial statements it cannot classify any financial assets as HTM investments in the consolidated financial statements unless the exemption conditions in IAS 39 are met

20

bull On 1 January 2005 the Group has


Hang Seng BankHang Seng Bank (2004 Annual Report)

Case 3Case 3

y preclassified most of its Held-to-Maturity debt securities as Available-for-Sale securities

bull The change in fair value will cause volatility to the shareholders equity

bull On transition the revaluation gain or loss will be adjusted through a reserve in the

Explained why

Why volatility to equityto be discussed later


j gshareholderrsquos equity

bull No restatement of the 2004 accounts is required


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes

With fixeddeterminable payments

No

With fixed maturityYes

Has positive intention and ability to hold to maturity and fulfils

tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21


bull Non-derivative financial assets with fixed or determinable payments that are

Definition


through PLHTM

investmentsAFS financial

assets

not quoted in an active market other thanndash those the entity intends to sell immediately or in the near term (which shall

be classified as held for trading)ndash those initially designated as FA at FV through PLndash those initially designated as AFS financial assetsndash those for which the holder may not recover substantially all of its the initial

investment other than because of credit deterioration which shall be classified as AFS financial assets


bull An interest acquired in a pool of assets that are not loans or receivables is not a loan or receivable (for example an interest in a mutual fund or a similar fund)

bull Examples include loan assets trade receivables rental deposits deposits held by banks helliphellip


Classification of Investment in Preference Share

Loans and receivables Definition

Can an equity instrument such as a preference share with fixed or determinable payments be classified within loans and receivables by the holder

Yesbull If a non-derivative equity instrument would be recorded as a liability by the

issuer and it has fixed or determinable payments and is not quoted in an active market it can be classified within loans and receivables by the holder


active market it can be classified within loans and receivables by the holder provided the definition is otherwise met

bull IAS 32 provides guidance about the classification of a financial instrument as a liability or as equity from the perspective of the issuer of a financial instrument

bull If an instrument meets the definition of an equity instrument under IAS 32 it cannot be classified within loans and receivables by the holder

22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market

May recover substantially all

initial investments

No

Yes

NoWith quote inan active market

Yes

No


Ping An Insurance (Group) Co of China LtdPing An Insurance (Group) Co of China Ltd

Case 4

bull Accounting report 2006Financial assetsbull The Group classifies its investments into

o financial assets at fair value through profit or losso held-to-maturity financial assetso loans and receivables and o available-for-sale financial assets

bull The classification depends on the purpose for which the investments were acquired or originated


q gbull The available-for-sale and held-to-maturity categories are used

o when the relevant liability (including shareholdersrsquo funds) are relatively passively managed andor carried at amortized cost

bull Financial assets are classified as at fair value through profit or loss o when for example the Group acquire such assets to cover certain

insurance and investment contract liabilities measured at fair value

23

Definitions and ClassificationCase 5

China Life Insurance Company Limitedbull Accounting report 2006

Financial assets ndash Classificationndash The Group classifies its investments in securities into the following categories

bull held-to-maturity securities bull financial assets at fair value through income and bull available-for-sale securities

ndash The classification depends on the purpose for which the investments were acquired Management determines the classification of its investments at initial recognition


initial recognition ndash Financial assets other than investment in securities are loans and receivables

bull which are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market other than those that the Group intends to sell in the short term or available for sale

bull Loans and receivables mainly comprise term deposits policy loans securities purchased under agreements to resell and accrued investment income as presented separately in the balance sheet

Morning Session


Initial Recognition


Measurement

24

Initial Recognition amp Measurement


Financial asset

Financial

bull An entity shall recognise a financial asset or afinancial liability on its balance sheet when and only when the entity becomes a party to the contractual provisions of the instruments

Implies trade date accountingExcept for a regular way purchase or sale of financial assets (to be discussed)

liability

Initial Recognition

Trade Date Accounting

Regular Way of Financial

Assets


of financial assets (to be discussed)

bull As a consequence of this principle an entity recognise all of its contractual rights and obligations under derivatives in its balance sheet as assets and liabilities respectively

bull Examplesndash Committing to a purchase of equity securitiesndash Committing to write a derivative option



Financial asset

Financial

Initial Recognition



Assets

bull When a financial asset or financial liability is recognised initially an entity shall measure the financial asset or a financial liabilityndash at its fair value plus transaction costsndash except for those classified

liability


pat fair value through profit or loss

No transaction cost will be initially recognised for financial instruments at fair value through profit or loss

Why

Initial MeasurementFair Value

Transaction Cost+

25

Initial Recognition amp MeasurementFinancial

asset

bull A regular way purchase or sale is a h l f fi i l

Derivative

bull A contract that requires or permits net l f h h i h l

Initial Recognition



Assets

purchase or sale of a financial assetunder a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned

bull A regular way purchase or sale of financial assets shall be recognised ( d d i d) i ith

settlement of the change in the valueof the contract is NOT a regular way contract

bull Instead such a contract is accounted for as

a derivative in the period between the trade date andthe settlement date


(and derecognised) using eithertrade date accounting orsettlement date accounting

bull The method used is applied consistently for all purchases and sales of financial assets that belong to the same category of financial assets

Trade date is the date that an entity commits itself to purchase or sell an asset


asset Derivative

Trade date is the date that an entity commits itself to purchase or sell an assetbull Trade date accounting refers to

a) the recognition of an asset to be received and the liability to pay for it on the trade date and

b) derecognition of an asset that is sold recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade dateGenerally interest does not start to accrue on the asset and corresponding liability until the settlement date when title passes


liability until the settlement date when title passes

Settlement date is the date that an asset is delivered to or by an entitybull Settlement date accounting refers to

a) the recognition of an asset on the day it is received by the entity andb) the derecognition of an asset and recognition of any gain or loss on

disposal on the day that it is delivered by the entity

26

bull When settlement date accounting is applied


asset Derivative

When settlement date accounting is appliedndash an entity accounts for any change in the fair value of the asset to be

received during the period between the trade date and the settlement date in the same way as it accounts for the acquired asset

ndash In other wordsthe change in value is not recognised for assets carried at cost or amortised cost it is recognised in profit or loss for assets classified as financial assets


at fair value through profit or loss andit is recognised in equity for assets classified as available for sale

Trade Date vs Settlement Date Accountingbull On 28 June 2011 Entity X agrees to purchase a bond for settlement on

1 July 2011 at $10 million

Initial Recognition amp MeasurementExample 12

ybull On 30 June 2011 the fair value of the bond is $101 millionbull On 1 July 2011 the bond purchase is settled for $100 million and the

fair value remains as $101 millionbull What would be the impact on the balance sheet of the bond purchase at

each of the dates of 28 June 30 June and 1 July

bull The balance sheet impact is shown for both the settlement date


papproach and the trade date approach

bull The example illustrates initial measurement of the bond purchase under two scenarios 1) subsequently carried at fair value (AFS financial assets) and2) subsequently carried at amortised cost

27

Trade Date vs Settlement Date Accounting


Bond measured atSettlement date accounting Trade date accounting

Fair value Amortised cost Fair value Amortised cost28 June 2011Financial asset - bondFinancial liability

ndashndash

ndashndash

100(100)

100(100)

30 June 2011Financial asset - receivable(revaluation gain)Financial asset - bondFinancial liabilityEquity

01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)


Equity (01) ndash (01) ndash

1 July 2011Financial asset - receivable(revaluation gain)Financial asset-bondCash paidEquity

ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash

Fair value at Initial Recognition ndash Low Interest Loanbull Entity A grants a 3-year loan of $50000 to a unrelated party B on 1

Jan 2005


ndash A charges B at an interest rate of 2 as A looks for further business with B

ndash A normally charges other parties at a current market lending rate of 4

bull Discuss the implication of the loan

F i l t I iti l R iti N I t t D it


Fair value at Initial Recognition ndash No Interest Depositbull Entity X is required to deposit $50000 to a customer in order to

guarantee that it would complete the service contract in 5 yearsrsquo timebull When the contract completes (say after 5 years) the deposit would be

refunded in full without any interest

28

Initial Measurement (IAS 39AG64)bull The fair value of a financial instrument on initial recognition is

normally the transaction price (ie the fair value of the


y p (consideration given or received)

bull However if part of the consideration given or received is for something other than the financial instrument the fair value of the financial instrument is estimated using a valuation techniquendash For example the fair value of a long-term loan or receivable that

carries no interest can be estimated as


bull the present value of all future cash receipts discounted using the prevailing market rate(s) of interest for a similar instrument (similar as to currency term type of interest rate and other factors) with a similar credit rating

ndash Any additional amount lent is an expense or a reduction of incomebull unless it qualifies for recognition as some other type of asset



Case 6

Investments in debt and equity securitiesndash The grouprsquos and the companyrsquos policies for investments in debt and equity

securities other than investments in subsidiaries associates and jointly controlled entities are as followso Investments in debt and equity securities are initially stated at cost which is

their transaction pricebull unless fair value can be more reliably estimated using valuation

g p


techniques whose variables include only data from observable markets o Cost includes attributable transaction costs except where indicated helliphellip

ndash These investments are subsequently accounted for as follows depending on their classificationi) Securities designated at fair value through profit or loss helliphellipii) Held-to-maturity securities helliphellipiii) Available-for-sale securities helliphellip

29

Fair value at Initial Recognition ndash Low Interest Loanbull Entity A grants a 3-year loan of $50000 to a related party B on 1 Jan

2005 as one kind of financial assistance to support Brsquos operation


pp pndash A charges B at a interest rate of 2 as A expects the return on Brsquos

future operation would be higherndash A charges another related party at a current market lending rate of

6bull Discuss the implication of the loan


bull On initial recognition Entity A should recognise the carrying amount of the loan at the fair value of the payments that it will receive from the related party

bull How is the fair value of the payments at initial recognition calculated


Cash inflow Discount factor Present value

31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821

Fair value at initial recognition $ 44654


bull Discounting the interest and principal repayments using the market rate of 6 Entity A will recognise an originated loan of $44654

bull The difference of $ 5346 is expensed immediatelyndash as the expectation about future operating profit of Entity B does

not qualify for recognition as an intangible asset

30

Fair value at Initial Recognitionbull Entity A grants a loan of $50000 to a related party B on 1 Jan 2005 as

one kind of financial assistance to support Brsquos operation


pp pndash A expects the return on Brsquos future operation would be higherndash However A has not specified the interest rate and repayment terms

with Entity Bndash A charges another related party at a current market lending rate of



No Active Market Valuation Technique (IAS 39AG79)bull Short-term receivables and payables with no stated

interest rate may be measured


yndash at the original invoice amount if the effect of

discounting is immaterial

bull Implies no matter it is receivable from related party or interest-freebull No discounting may be requiredbull Effective interest estimates (imputed


Effective interest estimates (imputed interest) may be required

bull Can management argue it is ldquorepayable on demandrdquo even they expect that it would not be repaid soonbull Is it an estimate or judgement issue

31

Morning Session


Loans and receivablesLoans and receivables

Financial instrumentFinancial

instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments




Measurement bull Financial Assets ndash Subsequent Measurement

MeasurementMeasurement after RecognitionClassification determine

Subsequent Measurement

Except forFA at FV at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

pbull investments in equity instruments that

bull do not have a quoted market price in an active market and

bull whose fair value cannot be reliably measuredat Cost


FA at FV through PL

HTM investments



receivables

32

Measurement after RecognitionDerivativeHeld for trading (or

derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No


Hedge AccountingDesignated as AFS

financial assetsNo

Yes


No


tainting rule With quote in

Yes

Yes

No


FA at FVthrough PL

HTM investments atamortised cost

Loans and receivables atamortised cost

YesWith quote in

an active market


initial investments

No

Yes

No

AFS financial assets atfair value

With quote inan active market

Yes

No

Debt A quote at active market Fair value measured reliably

Cost less Impairment

Yes

No Debt A quote at active market Fair value measured reliably

Yes

No

Measurement after Recognition


FA at FV at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost

Gain or loss to Profit or loss

Gain or loss to Equity

using the effective interest method

using the effective interest methodLoans and receivables

FA at FV through PL

HTM investments



greceivables

33



FA at FV Gain or loss shall be recognised in profit or loss

Gain or loss recognised directly in equitybull Except for

bull Impairment losses andbull Foreign exchange gains and losses

(financial asset is treated as if it were carried at amortised cost in the foreign

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



currency for translation purpose)bull Cumulative gain or loss recognised

directly in equity shall be transferred to profit or loss on derecognition of the financial asset

receivables


bull Fair value is the amount for which an asset could be exchanged or a liability settled between knowledgeable willing parties in an armrsquos length transaction g

Active market existsndash A financial instrument is regarded as quoted in an active market if quoted

prices are readily and regularly available from an exchange and similar entities

ndash The existence of published price quotations in an active market is the best evidence of fair value and when they exist they should be used to measure the financial asset (or financial liability)


( y)bull For an asset held (or liability to be issued) Current bid pricebull For an asset to be acquired (liability held) Current ask pricebull If the current bid and asking prices not available Price of most

recent transaction

34



No active marketndash An entity establishes fair value by using a valuation techniquendash To establish what the transaction price would have been on the

measurement date in an armrsquos length exchange motivated by normal business considerations

ndash Valuation techniques includebull Using recent armrsquos length market transactions between knowledgeable


g g g willing parties

bull Discounted cash flow analysisbull Option pricing models

bull Can NAV of an unlisted entity be considered as fair value

bull It is much like a finance question helliphellip yes amp no

Measurement after RecognitionExample 16

Fair Value of Quoted Price bull Financial Controller Ms Luk manages a fund and the rules applicable

to the fund require net asset values to be reported to investors on theto the fund require net asset values to be reported to investors on the basis of mid-market prices

bull In these circumstances would it be appropriate for an investment fund to measure its assets on that basis in the balance sheet of the fund

Nobull The existence of regulations that require a different measurement for specific

purposes does not justify a departure from the general requirement in IAS 39


p p j y p g qto use the current bid price in the absence of a matching liability position

bull In its financial statements an investment fund measures its assets at current bid prices

bull In reporting its net asset value to investors an investment fund may wish to provide a reconciliation between the fair values recognised on its balance sheet and the prices used for the net asset value calculation

35

Measurement after RecognitionCase 7

China Life Insurance Company LimitedA ti t 2006

ndash The fair values of quoted investments are based on current bid prices ndash If the market for a financial asset is not active

bull the Group establishes fair value by using valuation techniques ndash These include

bull the use of recent armrsquos length transactions

bull Accounting report 2006Recognition and measurement


g bull reference to other instruments that are substantially the same bull discounted cash flow analysis andbull option pricing models



Case 8

A ti t 2006A ti t 2006

bull For financial instruments where there is not an active market the fair value is determined by using valuation techniques Such techniques includendash using recent armrsquos length transactions ndash reference to the current market value of another instrument which is substantially

the same discounted cash flow analysis andor

bullbull Accounting report 2006Accounting report 2006Fair value of financial instruments


ndash discounted cash flow analysis andorndash option pricing models helliphellip

bull The use of different pricing models and assumptions could produce materially different estimates of fair values

36



Case 8

A ti t 2006A ti t 2006

bull The fair value of floating rate and overnight deposits with credit institutions is their carrying value The carrying value is the cost of the deposit and accrued interest

bull The fair value of fixed interest bearing deposits is estimated using discounted cash flow techniques Expected cash flows are discounted at current market rates for similar instruments at the balance sheet date



current market rates for similar instruments at the balance sheet datebull If the fair value cannot be measured reliably

ndash these financial instruments are measured at cost being the fair value of the consideration paid for the acquisition of the investment or the amount received on issuing the financial liability

ndash All transaction costs directly attributable to the acquisition are also included in the cost of the investment



FA at FV

For investments in equity instruments thatbull do not have a quoted market price in an

active market andbull whose fair value cannot be reliably

measuredndash Included those derivatives that are

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



ndash Included those derivatives that are linked to and must be settled by delivery of such quoted equity instruments

receivables

37



FA at FVAmortised cost of a financial instrument isbull the amount at which the financial

instrument is measured at initial recognition

bull minus principal repaymentsbull plus or minus the cumulative amortisation

using the effective interest method of any difference between that initial amount

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



yand the maturity amount and

bull minus any reduction (directly or through the use of an allowance account) for impairment or uncollectibility

receivables



Case 9

Insurance debtors other debtors and amounts due from group companiesndash Insurance debtors other debtors and amounts due from group companies are

initially recognised at fair value and thereafter stated at amortised cost less impairment losses for bad and doubtful debts o except where the receivables are interest-free loans made to related parties

without any fixed repayment terms or the effect of discounting would be immaterial

g p


bull In such cases the receivables are stated at cost less impairment losses for bad and doubtful

38

Measurement after Recognitionbull The effective interest method is a method

ndash of calculating the amortised cost of a financial instruments (or group of financial instruments) and

ndash of allocating the interest incomeexpense over the relevant period

bull The effective interest rate is the rate ndash is the rate that exactly discounts estimated future cash

paymentsreceipts through the expected life of the financial instrument or

ndash when appropriate a shorter period to the net carrying amount of the financial instrument


amount of the financial instrumentbull When calculating the effective interest rate

ndash an entity shall estimate cash flows considering all contractual terms of the financial instrument (for example prepayment call and similar options) but shall not consider future credit losses

Measurement after Recognitionbull The calculation includes

ndash all fees and points paid or received between parties to the contract that are an integral part of the effective i t t t ( IAS 18)interest rate (see IAS 18)

ndash transaction costs and ndash all other premiums or discounts

bull There is a presumption that ndash the cash flows and the expected life of a group of

similar financial instruments can be estimated reliably bull When applying the effective interest method

ndash an entity generally amortises any fees points paid or


an entity generally amortises any fees points paid or received transaction costs and other premiums or discounts included in the calculation of the effective interest rate over the expected life of the instrument

39


Loan fee income and costsThe current policy for


Case 10Case 10

bull The current policy for ndash recognition of loan fee income and servicing cost

bull is set out in note 3(a) above andndash incentive or rebate on loan origination

bull is charged as interest expense as incurred or amortised over the contractual loan life

bull On adoption of HKAS 39b t ti ll ll l f i d di tl tt ib t bl l i i ti


ndash substantially all loan fee income and directly attributable loan origination costs (including mortgage incentive payments) will be

bull amortised over the expected life of the loan as part of the effective interest calculation

Amortised Cost on Low Interest Loanbull Followed on Example 14 Entity A grants a 3-year loan of $50000 to an

important new customer in 1 Jan 2005


pndash The interest rate on the loan is 4ndash The current market lending rates for similar loans is 6

bull Entity A believes that the future business to be generated with this new customer will lead to a profitable lending relationship

bull On initial recognition Entity A recognised $47327 (as calculated below)



bull Calculate the amortised cost each year end

31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective

interest (6)Interest

received (4) Balance cf$ $ $ $

bull For example at 31122005 the entry is

Dr Loans receivable ($47 327 x 6) 2 840

31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000


Dr Loans receivable ($47327 x 6) 2840Cr Interest income (PL) 2840

Being effective interest income recognised for the year

Dr Cash (interest received $50000 x 4) 2000Cr Loans receivable 2000

Being cash interest received

MeasurementMeasurement ndash Impairment

Impairment

At each balance sheet date


FA at FVbull assess whether there is any

objective evidence that a financial asset (or group of financial assets) is impaired

bull Conditions must be fulfilledin recognising impairmentloss helliphellip

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41

Measurement ndash ImpairmentOutside the scope

of IAS 36

bull A financial asset (or a group of financial assets) is impaired and impairment losses are incurred if and only if

Conditions for Impairment

ndash there is objective evidence of impairment as a result of one or more events bull that occurred after the initial recognition of the asset

(a lsquoloss eventrsquo) and bull that loss event (or events) has an impact on the estimated

future cash flows of the financial asset (or group of financial assets that) can be reliably estimated


bull It may not be possible to identify a single discrete event that caused the impairment Rather the combined effect of several events may have caused the impairment

bull Losses expected as a result of future events no matter how likely are not recognised

Impairment (if there is objective evidence)


of IAS 36

FA at FVImplicitly no impairment review is needed as gain or loss on change in fair value is recognised in profit or loss

at Fair Value


FA at FV through PL

HTM investments



receivables

42

Measurement ndash Impairment

bull The amount of impairment loss is measured as the difference between

Outside the scope of IAS 36


FA at FV as the difference betweenndash the assetrsquos carrying amount andndash the present value of estimated future

cash flows (excluding future credit losses that have not been incurred) discounted at the financial assetrsquos original effective interest rate (ie the effective interest rate computed at initial recognition)

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



recognition)bull The carrying amount of the asset shall be

reduced eitherndash directly orndash through use of an allowance account

bull The amount of the loss shall be recognised in profit or loss

receivables


Sequence of Impairment Assessmentbull First assesses whether objective evidence



FA at FV bull First assesses whether objective evidence of impairment exists

ndash individually for financial assets that are individually significant and

ndash individually or collectively for financial assets that are not individually significant

bull If an entity determines that no objective evidence of impairment exists for an individually assessed financial asset whether significant or not

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



gndash it includes the asset in a group of financial

assets with similar credit risk characteristics and collectively assesses them for impairment

bull Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment

receivables

43



Measurement ndash ImpairmentExample 18


bull On initial recognition Entity A recognised $47327 and at 31 Dec 2005 the amortised cost was $ 48167 The repayment schedule is

Balance bfEffective


received (4) Balance cf31 12 2005 $ 47 327 $ 2 840 ($ 2 000) $ 48 167


bull At 2 Jan 2006 Entity A agreed a loan restructure with the customer and waived all the interest payments in 2006 and 2007

31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000


Cash to be received as estimated at 212006

Discount factor Present value

31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500

Carrying amount (per the balance as at 31122006) $ 48167Present Value of estimated future cash flows discounted at original effective interest rate as at 212006 44500


Impairment loss $ 3667

Dr Impairment loss (in income statement) $3667 Cr Allowance on impairment loss

(alternatively Loans and receivables) $3667

44



Case 11

bullbull Accounting report 2006Accounting report 2006

bull The Group assesses at each balance sheet date whether a financial asset or group of financial assets is impaired helliphellip

bull The Group first assesses whether objective evidence of impairment existsndash individually for financial assets that are individually significant and ndash individually or collectively for financial assets that are not individually

significant bull If it is determined that no objective evidence of impairment exists for an

individually assessed financial asset whether significant or not

Impairment of financial assets

Individual Assessment

C ll i


individually assessed financial asset whether significant or notndash the asset is included in a group of financial assets with similar

credit risk characteristics and ndash that group of financial assets is collectively assessed for impairment

bull Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognizedndash are not included in a collective assessment of impairment

bull The impairment assessment is performed at each balance sheet date

Collective Assessment


bull The amount of the impairment loss is


FA at FV


bull The amount of the impairment loss is measured as the difference betweenbull the carrying amount of the financial asset

andbull the present value of estimated future cash

flows discounted at the current market rate of return for a similar financial asset



FA at FV through PL

HTM investments

at Fair Value

at Fair Valueat Cost


receivables

45


bull 2 conditions to effect impairment lossbull when a decline in the fair value of an AFS



FA at FV


when a decline in the fair value of an AFS financial asset has been recognised directly in equity and

bull there is objective evidence that the asset is impaired

bull Then the cumulative loss that had been recognised directly in equity shall bebull removed from equity andbull recognised in profit or losseven the asset has not been derecognised


FA at FV through PL

HTM investments

at Fair Value

at Fair Value


even the asset has not been derecognisedbull The amount of the cumulative loss that is

removed from equity and recognised in profit or loss shall be the difference betweenndash the acquisition cost (net of any principal

repayment and amortisation) andndash the current fair valuendash less any impairment loss on that financial

asset previously recognised in profit or loss

receivables

Implication


Impairment reservesbull In view of the market downturn Entity C proposes to recognise

impairment or bad debt losses in excess of impairment losses that are d t i d th b i f bj ti id b t i i t i ldetermined on the basis of objective evidence about impairment in loan receivables from customers

bull Does IAS 39 permit such recognition

Nobull IAS 39 does not permit an entity to recognise impairment or bad debt

losses in addition to those that can be attributed to individually identified financial assets or identified groups of financial assets with


identified financial assets or identified groups of financial assets with similar credit risk characteristics on the basis of objective evidence about the existence of impairment in those assets

bull Amounts that an entity might want to set aside for additional possible impairment in financial assets such as reserves that cannot be supported by objective evidence about impairment are not recognised as impairment or bad debt losses under IAS 39

46


Impairment at Initial Recognition bull Entity A lends $2000 to Customer Bbull Based on past experience Entity A expects that 1 of the principal

amount of loans given will not be collectablebull Can Entity A recognise an immediate impairment loss of $20

Nobull IAS 39 requires financial asset to be initially measured at fair valuebull For a loan asset the fair value is the amount of cash lent adjusted for

any fees and costs (unless a portion of the amount lent is compensation for other stated or implied rights or privileges)


compensation for other stated or implied rights or privileges)bull In addition IAS 39 further requires that an impairment loss is

recognised only if there is objective evidence of impairment as a result of a past event that occurred after initial recognition

bull Thus it is inconsistent with IAS 39 to reduce the carrying amount of a loan asset on initial recognition through the recognition of an immediate impairment loss


Impairment Based on Ageing Analysisbull Entity A calculates impairment in the unsecured portion of loans and

receivables on the basis of a provision matrixndash that specifies fixed provision rates for the number of days a loan has been

classified as non-performing as followsbull 0 if less than 90 daysbull 20 if 90-180 daysbull 50 if 181-365 days andbull 100 if more than 365 days

bull Can the results be considered to be appropriate for the purpose of


calculating the impairment loss on loans and receivables

Not necessarilybull IAS 39 requires impairment or bad debt losses to be calculated as

the difference between the assetrsquos carrying amount and the present value of estimated future cash flows discounted at the financial instrumentrsquos original effective interest rate

47


Impairment on Portfolio Basisbull If one loan in Entity A is impaired but the fair value of another loan in

Entity A is above its amortised costbull Does IAS 39 allow non-recognition of the impairment of the first loan

Nobull If an entity knows that an individual financial asset carried at amortised cost

is impaired IAS 39 requires that the impairment of that asset should be recognised

bull IAS 39 states ldquothe amount of the loss is measured as the difference between the assetrsquos carrying amount and the present value of estimated future cash


flows (excluding future credit losses that have not been incurred) discounted at the financial assetrsquos original effective interest raterdquo

bull Measurement of impairment on a portfolio basis under IAS 39 may be applied to groups of small balance items and to financial assets that are individually assessed and found not to be impaired when there is indication of impairment in a group of similar assets and impairment cannot be identified with an individual asset in that group


Aggregate Fair Value Less Than Carrying Amountbull IAS 39 requires that gains and losses arising from changes in fair value

on AFS financial assets are recognised directly in equitybull If the aggregate fair value of such assets is less than their carrying

amount should the aggregate net loss that has been recognised directly in equity be removed from equity and recognised in profit or loss

Not necessarilybull The relevant criterion is not whether the aggregate fair value is less than the

carrying amount but whether there is objective evidence that a financial asset or group of assets is impairedA tit t h b l h t d t h th th i bj ti


bull An entity assesses at each balance sheet date whether there is any objective evidence that a financial asset or group of assets may be impaired

bull IAS 39 states that a downgrade of an entityrsquos credit rating is not of itself evidence of impairment although it may be evidence of impairment when considered with other available information

bull Additionally a decline in the fair value of a financial asset below its cost or amortised cost is not necessarily evidence of impairment (eg a decline in the fair value of a bond resulting from an increase in the basic risk-free interest rate)

48


bull 2004 Annual Report statesndash It is the Grouprsquos policy to make provisions for bad and doubtful debts

Case 12Case 12

It is the Group s policy to make provisions for bad and doubtful debts promptly where required and on a prudent and consistent basis

ndash There are two basic types of provisions specific and general each of which is considered in terms of the charge and the amount outstanding

bull On adoption of HKAS 39ndash Impairment provisions for advances assessed individually are calculated

using a discounted cash flow analysis for the impaired advancesndash Collective assessment of impairment for individually insignificant items or


items where no impairment has been identified on an individual basis is made using formula-based approaches or statistical methods

ndash Impairment provisions for advances will be presented as individually assessed and collectively assessed instead of specific provisions and general provisions

ndash There will be no significant change in the net charge for provisions to profit and loss account

Measurement ndash ImpairmentCase 13


ndash Financial assets other than those accounted for as at fair value through income are adjusted for impairments where there are declines in value that are considered to be other than temporary

ndash In evaluating whether a decline in value is other than temporary the Group considers several factors including but not limited to the following1) the extent and the duration of the decline

bull Accounting report 2006Impairment of financial assets other than at fair value through income


1) the extent and the duration of the decline2) the financial condition of and near-term prospects of the issuer and3) the Grouprsquos ability and intent to hold the investment for a period of time to

allow for a recovery of value

49



ndash When the decline in value is considered other than temporary bull relevant financial assets are written down to their net realised value and

the charge is recorded in ldquonet realised gains(losses) on financial assetsrdquo in the period the impairment is recognised

ndash The impairment loss is reversed through the income statement if



bull in a subsequent period the fair value of a debt security increases andbull the increase can be objectively related to an event occurring after the

impairment loss was recognised through income statement


Impairment losses on equity instrument


larr Is Reversal allowedImpairment

FA at FV


at Fair ValueAFS financial assets

at Fair Value

ndash shall NOT be reversed through profit or loss


FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost Impairment losses on debt instrumentndash If in a subsequent period

bull the fair value of a debt instrument classified as AFS financial assets increases and


receivables bull the increase can be objectively related to

an event occurring after the impairment loss was recognised in profit or loss

ndash Then the impairment loss shall be reversed with the amount of the reversal recognised in profit or loss

50


of IAS 36


FA at FV

AFS financial assets Such impairment losses shall NOT be

reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36

bull If in a subsequent periodthe amount of the impairment loss


FA at FV

at Amortised Cost

at Amortised Cost

ndash the amount of the impairment loss decreases and

ndash the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtorrsquos credit rating)

bull Then the previously recognised impairment loss shall be reversed eitherndash directly or


FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments


ndash by adjusting an allowance accountbull The reversal shall not result in a carrying

amount of the financial asset that exceeds what the amortised cost would have been had the impairment not been recognised at the date the impairment is reversed

bull The amount of the reversal shall be recognised in profit or loss

receivables

51



Case 14

o For available-for-sale securities the cumulative loss that has been recognised directly in equity is removed from equity and is recognised in the income statement helliphellip

o Impairment losses recognised in the income statement in respect of available-for-sale equity securities are not reversed through the income statement

g p

Impairment of investments in debt and equity securities and other receivables


bull Any subsequent increase in the fair value of such assets is recognised directly in equity

o Impairment losses in respect of available-for-sale debt securities are reversed if the subsequent increase in fair value can be objectively related to an event occurring after the impairment loss was recognised bull Reversals of impairment losses in such circumstances are recognised in

the income statement

MeasurementMeasurement ndash Reclassification

Reclassification

An entit shall NOT reclassif a financialFA at FV An entity shall NOT reclassify a financial instrument into or out of the fair value through profit or loss category while it is held or issued

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52

Measurement ndash Reclassification

A change in intention or abilityHTM i t t h ll b

Reclassification

FA at FV HTM investments shall bebull reclassified as AFS financial assetsbull re-measured at fair value andbull the difference between its carrying

amount and fair value shall be recognised directly in equity

Tainting rule triggeredAny remaining HTM investments shall be

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




Any remaining HTM investments shall be reclassified as AFS financial assets On such reclassification the difference between their carrying amount and fair value shall be recognised directly in equity

receivables


If a reliable measure becomes available on f i lFA at FV

Reclassification

at Fair ValueAFS financial assets at Cost

fair valuethe asset shall be re-measured at fair value andthe difference between its carrying amount and fair value shall be accounted for depending the classification of such asset as bull FA at FV through PL or

at Fair Value

at Fair Value

at Amortised Cost

at Amortised CostLoans and receivables

FA at FV through PL

HTM investments


gbull AFS financial assets

receivables

53

bull In case ofh i i t ti bilit


FA at FV

Reclassification

bull a change in intention or abilitybull in the rare circumstance a reliable

measure of fair value is no longer available or

bull tainting rule expiresbull Then it becomes appropriate to carry a

financial asset at cost or amortised costrather than at fair value

HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables

bull The fair value carrying amount of the asset on that date becomes its new cost or


FA at FV

Reclassification

on that date becomes its new cost or amortised cost as applicable

bull Any previous gain or loss on that asset that has been recognised directly in equity shall be accounted for as followsa) In the case of a financial asset with a

fixed maturitythe gain or loss shall be amortised to PL over the remaining life of the HTM i t t i th ff ti

HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


HTM investment using the effective interest method

b) In the case of a financial asset that does not have a fixed maturity

the gain or loss shall remain in equityuntil the financial asset is sold or otherwise disposed of when it shall be recognised in PL

receivables

54

MeasurementMeasurement ndash Summary

FA at FV

SubsequentMeasurement Impairment ReclassificationReversal


FA at FV through PL

HTM investments


at Fair Value to PL

at Fair Value to Equity

at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed

To HTM or AFS at Cost

To AFS at Fair Value

To AFS

Not described in IAS 39 i li itl t

NA

Related objectively to an event for debt instrument only

Related objectively to an event

Related objectively t t


receivables 39 implicitly not feasible

to an event

FA FV

IAS 39

bull Held for trading

Classified to Current or Non-Current

Current

Refer to IAS 1 Refer to IAS 1 and IFRS 5 as and IFRS 5 as wellwell

Measurement ndash Current or Non-Current

Loans and


FA at FV through PLbull Designated initially

Held for trading

bull Designated initially

Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments

bull Not clearly defined

bull Intention to hold to maturitybull When will it be matured

Non-Current

Current

Non-Current

55


bull IFRS 5 Non-current Assets Held for Sale and Discontinued Operations states (IFRS 53) thatndash Assets classified as non-current in accordance with IAS 1 Presentation ofAssets classified as non current in accordance with IAS 1 Presentation of

Financial Statements shall not be reclassified as current assetsbull until they meet the criteria to be classified as held for sale in

accordance with this IFRSndash Assets of a class that an entity would normally regard as non-current that

are acquired exclusively with a view to resale shall not be classified as currentbull unless they meet the criteria to be classified as held for sale in

accordance with this IFRS



Morning Session



Measurement bull Financial Liabilities ndash Subsequent Measurement

56

After initial recognition an entity shall measure all financial liabilities at amortised cost using the effective

Financial Liabilities ndash Measurement

Fi i l

Financial asset

Amortised costinterest method except fora) financial liabilities at fair value

through profit or lossb) financial liabilities that arise

bull when a transfer of a financial asset does not qualify for derecognition or

bull when the continuing


Financial liability

FL at FV through PL

Continuing involvement


ginvolvement approachapplies

Commitment to low-rate loans

Financial guarantee c) Financial guarantee contracts

d) Commitments to provide a loan at a below-market interest rate


bull Financial liabilities at fair value through profit or lossSi il t fi i l t t f i l th h fit l

bull Amortised costndash As those discussed in financial assets

FL at FV th h PL

Amortised cost

bull Similar to financial asset at fair value through profit or lossndash Those held for trading

bull Acquired principally for selling in the near termbull Recent actual short-term profit takingbull Derivatives that are liabilities (except for hedging

instruments)ndash Those designated (if allowed)

bull Excluded those unquoted and fair value cannot be reliably measured

Entity has NO choice

Entity has a choice

through PL


bull If a financial instrument that was previously recognised as a financial asset is measured at fair value and its fair value falls below zero it is a financial liability


bull Financial liabilities that arise whenndash a transfer of a financial asset does not qualify for

derecognition orndash when the Continuing Involvement Approach applies

57

Financial Liabilities ndash Measurementbull Financial liabilities held for trading include

a) derivative liabilities that are not accounted for as hedging instrumentsFL at FV

th h PL b) obligations to deliver financial assets borrowed by a short seller (ie an entity that sells financial assets it has borrowed and does not yet own)

c) financial liabilities that are incurred with an intention to repurchase them in the near term (eg a quoted debt instrument that the issuer may buy back in the near term depending on changes in its fair value) and

d) financial liabilities that are part of a portfolio of identified

through PL


) p pfinancial instruments that are managed together and for which there is evidence of a recent pattern of short-term profit-taking

bull The fact that a liability is used to fund trading activities does not in itself make that liability one that is held for trading



Case 15

Insurance creditors accrued charges and other creditors and amounts due to group companiesndash Insurance creditors accrued charges and other creditors and amounts due to

group companies are o initially recognised at fair value and o thereafter stated at amortised cost

unless the effect of discounting would be immaterial in which case they

g p


bull unless the effect of discounting would be immaterial in which case they are stated at cost

58

Financial Liabilities ndash Measurementbull Financial guarantee contract is defined in IAS 39 as a

contract thatndash requires the issuer to make specified payments to Commitment to

Financial guarantee

reimburse the holder for a loss it incursndash because a specified debtor fails to make payment when

due in accordance with the original or modified terms of a debt instrument

bull Financial guarantee contracts may have various legal forms such asbull a guarantee

low-rate loans


a guaranteebull some types of letter of creditbull a credit default contract orbull an insurance contract

Financial Liabilities ndash Measurementbull Financial guarantee contracts and commitment to

provide a loan at a below-market interest ratendash are within the scope of IAS 39

Financial guarantee

Commitment to pbull In consequence the issuer shall initially recognise and

measure it as other financial assets and liabilities and atndash its fair valuendash plus transaction costs

(unless classified as fair value through profit or loss)

low-rate loans

Initial Recognition



Assets



Transaction Cost+

bull If the financial guarantee contract was issued to an unrelated party in a stand-alone armrsquos length transaction bull its fair value at inception is likely to equal the

premium received unless there is evidence to the contrary

59

Financial Liabilities ndash MeasurementAfter initial recognitionbull An issuer of such contract and such guarantee shall

measure it at the higher of

Financial guarantee

Commitment to gi) the amount determined in accordance with IAS 37

Provisions Contingent Liabilities and Contingent Assets and

ii) the amount initially recognised less when appropriate cumulative amortisation recognised in accordance with IAS 18 Revenue

low-rate loans


Financial Liabilities ndash Measurementbull However for financial guarantee contracts alone such

contracts may be excluded from the scope of IAS 39bull IAS 392e states that

Financial guarantee

ldquoif an issuer of financial guarantee contracts ndash has previously asserted explicitly that it regards

such contracts as insurance contracts andndash has used accounting applicable to insurance

contracts bull the issuer may elect to apply either

IAS 39

Asserted Explicitly

Used Insurance Accounting


ndash IAS 39 or ndash IFRS 4

to such financial guarantee contracts (see paragraphs AG4 and AG4A)

The issuer may make that election contract by contract but the election for each contract is irrevocable

60



Case 16

bullbull Accounting report 2006Accounting report 2006Changes in accounting policies ndash Financial Guarantee Contractsbull Effective January 1 2006 the Group has adopted IAS 39 and IFRS 4

amendments on financial guarantee contracts o Under the amended IAS 39 financial guarantee contracts that are not considered

to be insurance contracts are bull recognized initially at fair value and bull generally re-measured at the higher of the amount determined in

accordance with IAS 37 ldquoProvisions Contingent Liabilities and Contingent Assetsrdquo and the amount initially recognized less when appropriate


Assets and the amount initially recognized less when appropriate cumulative amortization recognized in accordance with IAS 18 ldquoRevenuerdquo

bull Other than any financial guarantee contracts issued by the Grouprsquos banking operations which are accounted for under IAS 39 the Group o has previously regarded certain contracts it issued with financial guarantee

element as insurance contracts and o has used accounting applicable to insurance contracts

and accordingly has elected to apply IFRS 4 to account for such contracts

Financial Liabilities ndash MeasurementCase 17

Annual Report 2006 ndash Note 320 clarified thatpbull A financial guarantee contract is

ndash a contract that requires the issuer (or guarantor) to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument

bull Where the Group issues a financial guarantee the fair value of the guarantee is initially recognised as deferred income within trade and other payables

Wh id ti i i d i bl f th


ndash Where consideration is received or receivable for theissuance of the guarantee the consideration is recognised in accordance with the Grouprsquos policies applicable to that category of asset

ndash Where no such consideration is received or receivablean immediate expense is recognised in incomestatement on initial recognition of any deferred income

Dr CashAssetsCr Payables

Dr Profit amp lossCr Payables

61


Annual Report 2006 ndash Note 320 clarified that

bull The amount of the guarantee initially recognised as deferred incomendash is amortised in income statement over the term of the

guarantee as income from financial guarantees issued bull In addition provisions are recognised if and when

ndash it becomes probable that the holder of the guarantee will call upon the Group under the guarantee and

p

Dr PayablesCr Profit amp loss



will call upon the Group under the guarantee and ndash the amount of that claim on the Group is expected to

exceed the current carrying amount ie the amount initially recognised less accumulated amortisation where appropriate


How much did it have helliphellip

Annual Report 2006 ndash Note 36 set outp


Most critical hellip ldquoIn the opinion of the directors of the Companyndash no material liabilities will arise from the above guarantees which arose in the

ordinary course of business andndash the fair value of the corporate guarantees granted by the Company is immaterial

62


Suncorp Technologies Limited ndash 2006 Annual ReportNote 3ndash In relation to financial guarantees granted to certain banks over the repayment

of loans by a jointly controlled entity the Group has applied the transitional provisions of HKAS 39

ndash The fair value of the financial guarantee contracts at the date of grant was approximately HK$34 million

ndash It represents a deemed capital contribution to the jointly controlled entity and has been included in the cost of investment in the jointly controlled entity

Note 26


Note 26ndash In September 2006 the Group has given financial guarantees to two banks in

respect of the credit facilities of HK$56634000 granted to a jointly controlled entity for a period of 10 months

ndash The directors have assessed the fair value at the date of granting the financial guarantees to be approximately HK$3354000 and the amount is amortised to the consolidated income statement over the period of the facilities granted

Financial Liabilities ndash MeasurementReclassificationbull Similar to financial asset transfer

into or out of financial liabilities at Fi i l

Financial asset

Amortised costfair value through profit or loss is prohibited while it is held or issued

bull Unless in rare cases a reliable measure of fair value is no longer available

bull Then it should be carried at amortised cost


Financial liability

FL at FV through PL



Implicationbull Reclassification is infrequent or

rare


Financial guarantee

63

Morning Session



Derivatives

Definitions ndash DerivativerArr is a financial instrument or other contract within the

scope of IAS 39 with all 3 of the following characteristics

Derivative

a) its value changes in response to the change in a specified interest rate financial instrument price commodity price foreign exchange rate index of prices or rates credit rating or credit index or other variable (sometimes called the lsquounderlyingrsquo)

b) it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a i il t h i k t f t d

Value change based on an underlying

Little or no initial net investment

S l d


Derivative

Equity instrument


Financial asset


similar response to changes in market factors andc) it is settled at a future date

Settled ata future date

64

Definitions ndash DerivativeExample 24

Type of contract Underlying variableInterest Rate Swap Interest ratesCurrency Swap (Foreign C rrenc rates

DerivativeTypical example

bull Future and forwardbull Swap and options



S l d

y p ( gExchange Swap) Currency rates

Commodity Swap Commodity prices

Equity Swap Equity prices (equity of another entity)

Credit Swap Credit rating credit index or credit price

Total Return Swap Total fair value of the reference asset and interest rates

Purchased or Written Treasury

bull Swap and options



Purchased or Written Treasury Bond Option Interest rates

Purchased or Written Currency Option Currency rates

Currency FuturesForward Currency rates

Commodity FuturesForward Commodity prices

Equity Forward Equity prices


2 Non-Derivative Transactionsbull Entity A makes a 5-year fixed rate loan to



S l d

Entity Bbull Entity B at the same time makes a 5-year

variable rate loan for the same amount to Entity A

bull There are no transfers of principal at inception of the 2 loans since A and B have a netting agreement

bull Is this a derivative under IAS 39

radic

radic

radic



Is this a derivative under IAS 39

Yes it meets the definition of a derivativebull The contractual effect of the loans is the equivalent of

an interest rate swap arrangement with no initial net investment

radic

65


bull Non-derivative transactions are aggregated and treated as a derivative when the transactions result in substance in a derivative



S l d

substance in a derivativebull Indicators of this would include

bull They are entered into at the same time andin contemplation of one another

bull They have the same counterpartybull They relate to the same riskbull There is no apparent economic need or

substantive business purpose for structuring the t ti t l th t ld t l h



transactions separately that could not also have been accomplished in a single transaction

bull The same answer would apply if Entity A and Entity B did not have a netting agreement because the definition of a derivative instrument in IAS 39 does not require net settlement


Prepaid forwardbull An entity enters into a forward contract to

purchase shares of stock in 1 year at the



S l d

Nobull The forward contract fails the ldquolittlerdquo or no

i iti l t i t trdquo t t f d i ti

p yforward price

bull It prepays at inception based on the current price of the shares

bull Is the forward contract a derivative

radic

times



initial net investmentrdquo test for a derivative radic

66

Definitions ndash Derivative


Case 19


bull Derivative financial instruments include ndash options embedded in convertible bonds purchased by the Groupndash derivatives embedded in certain insurance contracts ndash interest rate swaps and futures ndash credit default swaps ndash cross currency swaps ndash forward currency contracts and

Derivative financial instruments


ndash options on interest rates currencies and equities etc

bull Derivative financial instruments are classified as held for tradingndash unless they are designated as effective hedging instruments

bull All derivatives are carriedndash as assets when the fair values are positive andndash as liabilities when the fair values are negative

Embedded DerivativesIAS 39 introduce Embedded Derivativebull it is a component of a hybrid (combined) instrument

that also include a non-derivative host contract Host Contract

Hybrid (Combined) Contract

bull An embedded derivative causes some or all of the cash flows that otherwise would be required by the contractndash to be modified according to a variable

bull say specified interest rate financial instrument price commodity price

ndash with the effect that some of the cash flows of the combined instrument vary in a way similar to a stand-alone derivative

Embedded Derivative


foreign exchange rate index of prices or rates credit rating or credit index or other variable

bull A derivative thatndash is attached to a financial instrumentndash but is contractually transferable independently of that instrument orndash has a different counterparty from that instrumentis NOT an embedded derivative BUT a separate financial instrument

Remember what derivative is

67

Embedded Derivatives

Host Contract

bull Investments in convertible bonds (with equity conversion feature)

bull Equity-indexed interest or principal payments

Example 27

Embedded Derivative

Equity indexed interest or principal payments embedded in a host debt instrument (equity-linked interest or principal payments)

bull An option or automatic provision to extend the remaining term to maturity of a debt instrument

bull A call put surrender or prepayment optionembedded in a host debt instrument

bull Equity kicker


bull Equity kickerbull Equity-linked notesbull Equity call and put optionsbull Inflation-indexed lease paymentsbull Contingent rentalsbull More helliphellip but so


IAS 39 requires an embedded derivativebull shall be separated from the host contract and

Host Contract


bull accounted for as a derivative under IAS 39if and only ifa the economic characteristics and risks of the

embedded derivative are not closely related to the economic characteristics and risks of the host contract

b a separate instrument with the same terms as the

Embedded Derivative


embedded derivative would meet the definition of a derivative and

c the hybrid (combined) instrument is not measured at fair value with changes in fair value recognised in profit or loss

68


Economic characteristics and risks NOT closely related

timesHost Contract


Embedded derivative meets the definition of derivative

Hybrid instruments NOTd t FV th h PL

radic

radic

times

times

Embedded Derivative


measured at FV through PL

Separate the Embedded Derivative and accounted for

under IAS 39

radic

Not Require to Separate the Embedded Derivative

To assess economic characteristics and risksbull If a host contract

bull has no stated or predetermined maturity and



bull represents a residual interest in the net assets of an entity

then its economic characteristics and risks are those of an equity instrument andan embedded derivative would need to possess equity characteristics related to the same entity to be regarded as closely

l t d


relatedbull If the host contract

bull is not an equity instrument andbull meets the definition of a financial instrument

then its economic characteristics and risks are those of a debt instrument

bullbull Guarantee FundGuarantee Fundbullbull Alternatively should we Alternatively should we

name it as helliphellip bond name it as helliphellip bond with indexwith index--linked linked interestinterest

69

If separation is not requiredrArr Hybrid (combined)

contract shall be accounted for under

Embedded DerivativesIf separation is required and can be measuredrArr Host Contract shall be

accounted for under accounted for under applicable IFRS

accounted for under applicable IFRS

rArr Embedded Derivative shall be accounted under IAS 39 as a derivative

If separation is required but cannot be measuredrArr Entire Hybrid (Combined)

Contract is classified as financial instrument that


financial instrument that is held for trading


under IAS 39Not Require to Separate the

Embedded Derivative



Case 20


bull Embedded derivatives are treated as separate derivatives and are recorded at fair valuendash if their economic characteristics and risks are not closely related to those of the

related host contract andndash the host contract is not itself recorded at fair value through the income statement

bull Embedded derivatives that meet the definition of insurance contracts are treated and measured as insurance contracts

Embedded derivatives


treated and measured as insurance contractsbull Derivative financial instruments held for trading are typically entered into with

the intention to settle in the near future ndash These instruments are initially recorded at fair value ndash Subsequent to initial recognition these instruments are re-measured at fair value ndash Fair value adjustments and realized gains and losses are recognized in the

income statement

70

bull An embedded non-option derivative(such as an embedded forward or swap)


Host Contract

Hybrid (Combined) ContractTo separate embedded derivative

ndash is separated from its host contract on the basis of its stated or implied substantive terms

ndash so as to result in it having a fair value of zero at initial recognition

bull An embedded option-based derivative(such as an embedded put call cap floor or swaption)ndash is separated from its host contract on the basis of

Embedded Derivative


the stated terms of the option featurebull The initial carrying amount of the host instrument is

ndash the residual amount after separating the embedded derivative

Host Contract Embedded Derivative

Hybrid (Combined) Contract= -

bull If an entity is unable to determine reliably the fair value of an embedded derivative on the basis of its t d diti (f l b th


Host Contract


terms and conditions (for example because the embedded derivative is based on an unquoted equity instrument)

the fair value of the embedded derivative is the difference betweenbull the fair value of the hybrid instrument and bull the fair value of the host contractif those can be determined under IAS 39

Embedded Derivative


Host ContractEmbedded Derivative


bull If the entity is still unable to determine the fair value of the embedded derivative using the above method

the combined instrument is treated as held for trading

71

Fair value cannot be reliably measuredIf an embedded derivative that is required to be separated cannot be reliably measured because it will be settled by an unquoted equity

Embedded DerivativesExample 28

y y q q yinstrument whose fair value cannot be reliably measured is the embedded derivative measured at cost

Nobull In this case the entire combined contract is treated as a financial

instrument held for tradingbull If the fair value of the combined instrument can be reliably


measured the combined contract is measured at fair valuebull The entity might conclude however that the equity component of

the combined instrument may be sufficiently significant to preclude it from obtaining a reliable estimate of the entire instrument

bull In that case the combined instrument is measured at cost less impairment

Index-linked Principalbull Entity A purchases a 5-year equity-index-linked note with an original

issue price of $10 at a market price of $12 at the time of purchase


bull The note requires no interest payments before maturitybull At maturity the note requires

ndash Payment of the original issue price of $10ndash Plus a supplemental redemption amount that depends on whether

bull a specified share price index gt a predetermined level at the maturity datendash If the share index lt or = the predetermined level

bull the supplemental redemption amount is zero


pp pndash If the share index gt the predetermined level

bull the supplemental redemption amount equal a factor of level of the share index at maturity

bull Entity A has the positive intention and ability to hold the note to maturitybull Can Entity A classify the note as a held-to-maturity investment

72

Yes subject to the separation of embedded derivativebull The note can be classified as a HTM investment because


Index-linked Principal

The note can be classified as a HTM investment becausendash it has a fixed payment of $10 and fixed maturity andndash Entity A has the positive intention and ability to hold it to maturity

bull However the equity index feature is a call option not closely related to the debt host which must be separated as an embedded derivative

bull The purchase price of $12 is allocated betweenndash the host debt instrument andndash the embedded derivative

For e ample


bull For examplendash if the fair value of the embedded option at acquisition is $4ndash the host debt instrument is measured at $8 on initial recognitionndash Then the discount of $2 that is implicit in the host bond

(principal of $10 minus the original carrying amount of $8)is amortised to profit or loss over the term to maturity of the note using the effective interest method

Capital protection bond guarantee fund or bond with index-linked interestCan a bond with a fixed payment at maturity and a fixed maturity date be


p y y yclassified as a held-to-maturity investment if the bondrsquos interest payments are indexed to the price of a commodity or equity and the entity has the positive intention and ability to hold the bond to maturity

Yes but helliphellipbull The commodity-indexed or equity-indexed interest payments result in

an embedded derivative that is separated and accounted for as a


derivative at fair value (IAS 3911) bull IAS 3912 (stated at fair value through profit or loss) is not applicable

bull since it should be straightforward to separate the host debt investment (the fixed payment at maturity) from the embedded derivative (the index-linked interest payments)

73



timesHost Contract




radic

radic

times

timesImpliesbull So long as the Hybrid

(Combined) Contract is d t FV th h

Embedded Derivative




under IAS 39

radic



bull No separation is required

Management can choose it to avoid separation helliphellip


Derivatives and Embedded Derivatives

Case 21

Annual Report 2006bull Derivatives and Embedded Derivatives

ndash Derivatives including separated embedded derivatives are also classified as held for trading unless they are designated asbull effective hedging instruments or bull financial guarantee contracts

ndash Gains or losses on investments held for trading are recognised in the income statementWh i b dd d d i i


ndash Where a contract contains one or more embedded derivativesbull the entire hybrid contract may be designated as a financial

asset at fair value through profit or loss except where o the embedded derivative does not significantly modify the

cash flows or it is clear that separation of the embedded derivative is prohibited

74


Full set of slides in PDF may be found in wwwNelsonCPAcomhk


Nelson LamNelson Lam 林智遠林智遠nelsonnelsoncpacomhkwwwnelsoncpacomhk



QampA SessionQampA SessionQampA SessionQampA Session



2

IAS 32 rArr Financial Instruments Presentation


IAS 39 rArr Financial Instruments Recognition and measurement

IFRS 7 rArr Financial Instruments Disclosure ndash The most interesting standardsndash The most lengthiest standardsndash The most complex standardsndash Cover some unusual or more complex contracts


pndash But also cover some very simple elements in the

financial statements for examplebull Cash trade receivable helliphellipbull Share capital trade payable bank loans helliphellip

IFRS 4 rArr Insurance Contracts

Objectives

IAS 32bull Aims at enhancing financial

statement usersrsquo understanding

IAS 39bull Aims at establishing principles

for recognising and measuringstatement users understanding of the significance of financial instruments to an entityrsquos financial position performance and cash flows

bull Contains requirements for the presentation of financial instruments and

for recognising and measuringfinancial assets financial liabilities and some contracts to buy or sell non-financial items


identifies the information that should be disclosed about them

Before IFRS 7 effective in 2007

IFRS 4bull Specifies the financial reporting for insurance contracts by any entity

that issues such contracts

3

Main Coverage















Case 1





HKFRS 4 applies to






4



















5

Morning Session


Comprehensive

Contentious and k i

Afternoon Session

key issues










Morning Session



Scope Scope

Initial Recognition




are clearly defined


Measurement

balance sheet)



6


Morning Session

Scope Scope




IAS 32

IAS 39


IFRS 7






7













U l





8


Morning Session

Definitions







Financial asset

Financial liability

Equity instrumentor

of one entity

of another entity

9








Financial asset

Financial liability

Equity instrumentor


Derivative








instrument

Financial asset

Financial liability

Equity instrumentor


10




Equity instrument


Financial asset


Derivative






Equity instrument


Financial asset


Derivative

11



Financial asset

Financial liability




FA at FV through PL

AFS fi i l



Financial asset

Financial liability




HTM investments






12













derivative)


through PL

Yes

NoYes


instrumentNo


No

Yes


through PL




Hedge Accounting



FA at FV through PL



13
















Case 2





g p




14



Case 2



g p
















15

HTM investments













HTM investments



ndash 5 5-Year note







t d f




16



HTM investments









Callable bond

HTM investments








17


Puttable bond

HTM investments






















18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










3

Main Coverage















Case 1





HKFRS 4 applies to






4



















5

Morning Session


Comprehensive

Contentious and k i

Afternoon Session

key issues










Morning Session



Scope Scope

Initial Recognition




are clearly defined


Measurement

balance sheet)



6


Morning Session

Scope Scope




IAS 32

IAS 39


IFRS 7






7













U l





8


Morning Session

Definitions







Financial asset

Financial liability

Equity instrumentor

of one entity

of another entity

9








Financial asset

Financial liability

Equity instrumentor


Derivative








instrument

Financial asset

Financial liability

Equity instrumentor


10




Equity instrument


Financial asset


Derivative






Equity instrument


Financial asset


Derivative

11



Financial asset

Financial liability




FA at FV through PL

AFS fi i l



Financial asset

Financial liability




HTM investments






12













derivative)


through PL

Yes

NoYes


instrumentNo


No

Yes


through PL




Hedge Accounting



FA at FV through PL



13
















Case 2





g p




14



Case 2



g p
















15

HTM investments













HTM investments



ndash 5 5-Year note







t d f




16



HTM investments









Callable bond

HTM investments








17


Puttable bond

HTM investments






















18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










4



















5

Morning Session


Comprehensive

Contentious and k i

Afternoon Session

key issues










Morning Session



Scope Scope

Initial Recognition




are clearly defined


Measurement

balance sheet)



6


Morning Session

Scope Scope




IAS 32

IAS 39


IFRS 7






7













U l





8


Morning Session

Definitions







Financial asset

Financial liability

Equity instrumentor

of one entity

of another entity

9








Financial asset

Financial liability

Equity instrumentor


Derivative








instrument

Financial asset

Financial liability

Equity instrumentor


10




Equity instrument


Financial asset


Derivative






Equity instrument


Financial asset


Derivative

11



Financial asset

Financial liability




FA at FV through PL

AFS fi i l



Financial asset

Financial liability




HTM investments






12













derivative)


through PL

Yes

NoYes


instrumentNo


No

Yes


through PL




Hedge Accounting



FA at FV through PL



13
















Case 2





g p




14



Case 2



g p
















15

HTM investments













HTM investments



ndash 5 5-Year note







t d f




16



HTM investments









Callable bond

HTM investments








17


Puttable bond

HTM investments






















18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










5

Morning Session


Comprehensive

Contentious and k i

Afternoon Session

key issues










Morning Session



Scope Scope

Initial Recognition




are clearly defined


Measurement

balance sheet)



6


Morning Session

Scope Scope




IAS 32

IAS 39


IFRS 7






7













U l





8


Morning Session

Definitions







Financial asset

Financial liability

Equity instrumentor

of one entity

of another entity

9








Financial asset

Financial liability

Equity instrumentor


Derivative








instrument

Financial asset

Financial liability

Equity instrumentor


10




Equity instrument


Financial asset


Derivative






Equity instrument


Financial asset


Derivative

11



Financial asset

Financial liability




FA at FV through PL

AFS fi i l



Financial asset

Financial liability




HTM investments






12













derivative)


through PL

Yes

NoYes


instrumentNo


No

Yes


through PL




Hedge Accounting



FA at FV through PL



13
















Case 2





g p




14



Case 2



g p
















15

HTM investments













HTM investments



ndash 5 5-Year note







t d f




16



HTM investments









Callable bond

HTM investments








17


Puttable bond

HTM investments






















18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










6


Morning Session

Scope Scope




IAS 32

IAS 39


IFRS 7






7













U l





8


Morning Session

Definitions







Financial asset

Financial liability

Equity instrumentor

of one entity

of another entity

9








Financial asset

Financial liability

Equity instrumentor


Derivative








instrument

Financial asset

Financial liability

Equity instrumentor


10




Equity instrument


Financial asset


Derivative






Equity instrument


Financial asset


Derivative

11



Financial asset

Financial liability




FA at FV through PL

AFS fi i l



Financial asset

Financial liability




HTM investments






12













derivative)


through PL

Yes

NoYes


instrumentNo


No

Yes


through PL




Hedge Accounting



FA at FV through PL



13
















Case 2





g p




14



Case 2



g p
















15

HTM investments













HTM investments



ndash 5 5-Year note







t d f




16



HTM investments









Callable bond

HTM investments








17


Puttable bond

HTM investments






















18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










7













U l





8


Morning Session

Definitions







Financial asset

Financial liability

Equity instrumentor

of one entity

of another entity

9








Financial asset

Financial liability

Equity instrumentor


Derivative








instrument

Financial asset

Financial liability

Equity instrumentor


10




Equity instrument


Financial asset


Derivative






Equity instrument


Financial asset


Derivative

11



Financial asset

Financial liability




FA at FV through PL

AFS fi i l



Financial asset

Financial liability




HTM investments






12













derivative)


through PL

Yes

NoYes


instrumentNo


No

Yes


through PL




Hedge Accounting



FA at FV through PL



13
















Case 2





g p




14



Case 2



g p
















15

HTM investments













HTM investments



ndash 5 5-Year note







t d f




16



HTM investments









Callable bond

HTM investments








17


Puttable bond

HTM investments






















18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










8


Morning Session

Definitions







Financial asset

Financial liability

Equity instrumentor

of one entity

of another entity

9








Financial asset

Financial liability

Equity instrumentor


Derivative








instrument

Financial asset

Financial liability

Equity instrumentor


10




Equity instrument


Financial asset


Derivative






Equity instrument


Financial asset


Derivative

11



Financial asset

Financial liability




FA at FV through PL

AFS fi i l



Financial asset

Financial liability




HTM investments






12













derivative)


through PL

Yes

NoYes


instrumentNo


No

Yes


through PL




Hedge Accounting



FA at FV through PL



13
















Case 2





g p




14



Case 2



g p
















15

HTM investments













HTM investments



ndash 5 5-Year note







t d f




16



HTM investments









Callable bond

HTM investments








17


Puttable bond

HTM investments






















18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










9








Financial asset

Financial liability

Equity instrumentor


Derivative








instrument

Financial asset

Financial liability

Equity instrumentor


10




Equity instrument


Financial asset


Derivative






Equity instrument


Financial asset


Derivative

11



Financial asset

Financial liability




FA at FV through PL

AFS fi i l



Financial asset

Financial liability




HTM investments






12













derivative)


through PL

Yes

NoYes


instrumentNo


No

Yes


through PL




Hedge Accounting



FA at FV through PL



13
















Case 2





g p




14



Case 2



g p
















15

HTM investments













HTM investments



ndash 5 5-Year note







t d f




16



HTM investments









Callable bond

HTM investments








17


Puttable bond

HTM investments






















18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










10




Equity instrument


Financial asset


Derivative






Equity instrument


Financial asset


Derivative

11



Financial asset

Financial liability




FA at FV through PL

AFS fi i l



Financial asset

Financial liability




HTM investments






12













derivative)


through PL

Yes

NoYes


instrumentNo


No

Yes


through PL




Hedge Accounting



FA at FV through PL



13
















Case 2





g p




14



Case 2



g p
















15

HTM investments













HTM investments



ndash 5 5-Year note







t d f




16



HTM investments









Callable bond

HTM investments








17


Puttable bond

HTM investments






















18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










11



Financial asset

Financial liability




FA at FV through PL

AFS fi i l



Financial asset

Financial liability




HTM investments






12













derivative)


through PL

Yes

NoYes


instrumentNo


No

Yes


through PL




Hedge Accounting



FA at FV through PL



13
















Case 2





g p




14



Case 2



g p
















15

HTM investments













HTM investments



ndash 5 5-Year note







t d f




16



HTM investments









Callable bond

HTM investments








17


Puttable bond

HTM investments






















18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










12













derivative)


through PL

Yes

NoYes


instrumentNo


No

Yes


through PL




Hedge Accounting



FA at FV through PL



13
















Case 2





g p




14



Case 2



g p
















15

HTM investments













HTM investments



ndash 5 5-Year note







t d f




16



HTM investments









Callable bond

HTM investments








17


Puttable bond

HTM investments






















18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










13
















Case 2





g p




14



Case 2



g p
















15

HTM investments













HTM investments



ndash 5 5-Year note







t d f




16



HTM investments









Callable bond

HTM investments








17


Puttable bond

HTM investments






















18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










14



Case 2



g p
















15

HTM investments













HTM investments



ndash 5 5-Year note







t d f




16



HTM investments









Callable bond

HTM investments








17


Puttable bond

HTM investments






















18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










15

HTM investments













HTM investments



ndash 5 5-Year note







t d f




16



HTM investments









Callable bond

HTM investments








17


Puttable bond

HTM investments






















18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










16



HTM investments









Callable bond

HTM investments








17


Puttable bond

HTM investments






















18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










17


Puttable bond

HTM investments






















18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










18



HTM investments





bonds








HTM investments










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










19



HTM investments









HTM investments







20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










20




Case 3Case 3




Explained why






derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


No



tainting rule

Yes

No

No

No


FA at FV through PL


HTM investments

Yes

21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










21



Definition


through PLHTM


assets

















22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










22


derivative)



Yes

NoYes


instrumentNo


No

Yes

Hedge Accounting

NoDesignated as AFS

financial assetsYes


tainting rule


No


Yes

No

No

With quote in Yes

No


FA at FV through PL


Yes

HTM investments


YesWith quote in

an active market


initial investments

No

Yes


Yes

No



Case 4









23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










23










Morning Session


Initial Recognition


Measurement

24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










24



Financial asset

Financial



liability

Initial Recognition



Assets







Financial asset

Financial

Initial Recognition



Assets


liability




Why


Transaction Cost+

25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










25


asset


Derivative


Initial Recognition



Assets











asset Derivative









26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










26



asset Derivative
















27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










27





ndashndash

ndashndash

100(100)

100(100)


01ndashndash

(0 1)

ndashndashndash

ndash101

(100)(0 1)

ndash100

(100)




ndash101

(100)(01)

ndash100

(100)ndash

ndash101

(100)(01)

ndash100

(100)ndash


Jan 2005










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










28












Case 6




g p




29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










29












31 12 2005 $50 000 x 2 = $ 1 000 1 (1 + 6)1 $ 94331122005 $50000 x 2 = $ 1000 1 (1 + 6) $ 943

31122006 $ 1000 1 (1 + 6)2 $ 890

31122007 $ 51000 1 (1 + 6)3 $ 42821






30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










30

















31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










31

Morning Session




instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments





instrument

Financial asset

Financial asset

Financial liability

Financial liability

FA at FV through PL

FA at FV through PL

HTM investments

HTM investments








at Fair Value

at Amortised Cost

at Amortised Cost





FA at FV through PL

HTM investments



receivables

32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










32


derivative)



Yes

NoYes


instrumentNo


No

Yes

No

No



financial assetsNo

Yes


No



Yes

Yes

No


FA at FVthrough PL



YesWith quote in

an active market


initial investments

No

Yes

No



Yes

No



Yes


Yes

No




at Fair Value

at Amortised Cost

at Amortised Cost

at Cost





FA at FV through PL

HTM investments



greceivables

33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










33







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables








recent transaction

34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










34





















35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










35











Case 8

A ti t 2006A ti t 2006







36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










36



Case 8

A ti t 2006A ti t 2006










FA at FV




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments




receivables

37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










37







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Case 9




g p



38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










38


















39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










39




Case 10Case 10

















31122005 $ 50000 x 4 = $ 2000 1 (1 + 6)1 $ 1887

31122006 $ 2000 1 (1 + 6)2 $ 1780

31122007 $ 52000 1 (1 + 6)3 $ 43660


40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










40


Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 48167

31122006 $ 48167 $ 2890 ($ 2000) $ 49057

31122007 $ 49057 $ 2943 ($ 2000) $ 50000







Impairment






at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










41


of IAS 36











of IAS 36


at Fair Value


FA at FV through PL

HTM investments



receivables

42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










42







at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables









at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments






receivables

43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










43






Balance bfEffective





31122005 $ 47327 $ 2840 ($ 2000) $ 4816731122006 $ 48167 $ 2890 ($ 2000) $ 4905731122007 $ 49057 $ 2943 ($ 2000) $ 50000




31122006 $ 0 1 (1 + 6)1 $ 0

31122007 $ 50000 1 (1 + 6)2 $ 44500






44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










44



Case 11








C ll i










FA at FV







FA at FV through PL

HTM investments

at Fair Value



receivables

45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










45





FA at FV






FA at FV through PL

HTM investments

at Fair Value

at Fair Value






receivables

Implication










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










46



















47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










47




















48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










48



Case 12Case 12

















49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










49














FA at FV



at Fair Value



FA at FV through PL

HTM investments

at Fair Value

at Amortised Cost

at Amortised Cost







50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










50


of IAS 36


FA at FV


reversed


FA at FV through PL

HTM investments

at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


receivables


of IAS 36



FA at FV

at Amortised Cost

at Amortised Cost





FA at FV through PL

at Fair Value

at Fair Value

at Cost


HTM investments





receivables

51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










51



Case 14



g p







Reclassification


at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments



receivables

52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










52



Reclassification




at Fair Value

at Fair Value

at Amortised Cost

at Amortised Cost

at Cost


FA at FV through PL

HTM investments





receivables



Reclassification



at Fair Value

at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments



receivables

53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










53



FA at FV

Reclassification





HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost


receivables



FA at FV

Reclassification




HTM investments


at Fair Value

at Amortised Cost


FA at FV through PL

HTM investments

at Cost

at Amortised Cost





receivables

54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










54


FA at FV



FA at FV through PL

HTM investments


at Fair Value to PL


at Amortised Cost

at Amortised Cost

at Cost

Not required

From Equity to PL

To PL

To PL

To PL

Not allowed



To AFS


NA






to an event

FA FV

IAS 39



Current



Loans and



Held for trading


Not clearl defined

Current

Non-Current

Current

Non-Current

Current


receivables

HTM investments



Non-Current

Current

Non-Current

55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










55









Morning Session




56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










56



Fi i l

Financial asset






Financial liability

FL at FV through PL










FL at FV th h PL

Amortised cost






Entity has a choice

through PL






57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










57






through PL






Case 15




g p



58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










58



Financial guarantee




low-rate loans





Financial guarantee




low-rate loans

Initial Recognition



Assets



Transaction Cost+



59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










59



Financial guarantee




low-rate loans




Financial guarantee




IAS 39

Asserted Explicitly






60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










60



Case 16




















61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










61






p












62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










62






Note 26







Financial asset





Financial liability

FL at FV through PL




rare


Financial guarantee

63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










63

Morning Session



Derivatives



Derivative





S l d


Derivative

Equity instrument


Financial asset




64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










64







S l d



















S l d





radic

radic

radic






radic

65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










65





S l d














S l d



p yforward price



radic

times




66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










66



Case 19














Embedded Derivative





67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










67


Host Contract



Example 27

Embedded Derivative




bull Equity kicker





Host Contract





Embedded Derivative




68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










68



timesHost Contract




radic

radic

times

times

Embedded Derivative




under IAS 39

radic








l t d







69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










69













Embedded Derivative



Case 20









income statement

70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










70



Host Contract





Embedded Derivative








Host Contract




Embedded Derivative






71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










71





















72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










72







For e ample












73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










73



timesHost Contract




radic

radic

times



Embedded Derivative




under IAS 39

radic







Case 21








74










74










Documents

IAS 32, IAS 39, IFRS 4 and IFRS 7 - Nelson CPA · 2007. 7. 20. · (see IFRS 3) for the acquirer only U. 7 Scope – Excluded from IAS 32 and 39 Example 1 1. Tony buys a 6-month future