International Financial Reporting Standards_guide.pdf

200 Chapter 17 Financial Instruments: Recognition and Measurement (IAS 39)
FIGURE 17.2 Derecognition of Financial Assets
Consolidate all subsidiaries (including any SPE) [Paragraph 15]
Determine whether the derecognition principles below are applied to
a part or all of an asset (or group of similar assets) [Paragraph 16]
Have the rights to the
cash flows from the asset expired?
[Paragraph 17(a)]
Yes
Derecognize the asset
No
Has the entity transferred
its rights to receive the cash
flows from the asset?
[Paragraph 18(a)]
No
Yes
Has the entity assumed
an obligation to pay the cash flows
from the asset that meets the
conditions in paragraph 19?
[Paragraph 18(b)]
No
Continue to recognize the asset
Yes
Has the entity transferred
substantially alll risks and rewards?
[Paragraph 20(a)]
Yes
Derecognize the asset
No
Has the entity retained
substantially all risks and rewards?
[Paragraph 20(b)]
Yes
Continue to recognize the asset
No
Has the entity retained
control of the asset?
[Paragraph 20(c)]
No
Derecognize the asset
Yes
Continue to recognize the asset to the extent of the entity’s
continuing involvement
Arrangements under which an entity retains the contractual rights to receive the cash flows of a financial asset, but
assumes a contractual obligation to pay the cash flows to one or more recipients (paragraph 18(b))
Source: IAS 39 Financial Instruments: Recognition and Measurement.