ipsas 29—financial instruments: recognition and measurement - IFAC

FINANCIAL INSTRUMENTS: RECOGNITION AND MEASUREMENT
management personnel (as defined in IPSAS 20, “Related Party
Disclosures”), for example the entity’s governing body and
chief executive officer.
In IPSAS 30, paragraphs 11–13 and AG4 require the entity to provide
disclosures about financial assets and financial liabilities it has designated as
at fair value through surplus or deficit, including how it has satisfied these
conditions. For instruments qualifying in accordance with (ii) above, that
disclosure includes a narrative description of how designation as at fair value
through surplus or deficit is consistent with the entity’s documented risk
management or investment strategy.
Investments in equity instruments that do not have a quoted market price in
an active market, and whose fair value cannot be reliably measured (see
paragraph 48(c) and Appendix A paragraphs AG113 and AG114), shall not
be designated as at fair value through surplus or deficit.
It should be noted that paragraphs 50, 51, 52, and Appendix A paragraphs
AG101–AG115, which set out requirements for determining a reliable
measure of the fair value of a financial asset or financial liability, apply
equally to all items that are measured at fair value, whether by designation
or otherwise, or whose fair value is disclosed.
Held-to-maturity investments are non-derivative financial assets with fixed
or determinable payments and fixed maturity that an entity has the positive
intention and ability to hold to maturity (see Appendix A paragraphs AG29–
AG38) other than:
(a) Those that the entity upon initial recognition designates as at fair
value through surplus or deficit;
(b) Those that the entity designates as available for sale; and
(c) Those that meet the definition of loans and receivables.
An entity shall not classify any financial assets as held to maturity if the
entity has, during the current financial year or during the two preceding
financial years, 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) other than sales
or reclassifications that:
(a) Are so close to maturity or the financial asset’s call date (e.g., less than
three months before maturity) that changes in the market rate of
interest would not have a significant effect on the financial asset’s fair
value;
(b) Occur after the entity has collected substantially all of the financial
asset’s original principal through scheduled payments or
prepayments; or
IPSAS 29 1034