ipsas 29—financial instruments: recognition and measurement - IFAC

FINANCIAL INSTRUMENTS: RECOGNITION AND MEASUREMENT
(c) Are attributable to an isolated event that is beyond the entity’s
control, is non-recurring and could not have been reasonably
anticipated by the entity.
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market other than:
(a) Those that the entity intends to sell immediately or in the near term,
which shall be classified as held for trading, and those that the entity
upon initial recognition designates as at fair value through surplus or
deficit;
(b) Those that the entity upon initial recognition designates as available
for sale; or
(c) Those for which the holder may not recover substantially all of its
initial investment, other than because of credit deterioration, which
shall be classified as available for sale.
An interest acquired in a pool of assets that are not loans or receivables (e.g.,
an interest in a mutual fund or a similar fund) is not a loan or receivable.
Available-for-sale financial assets are those non-derivative financial
assets that are designated as available for sale or are not classified as (a)
loans and receivables, (b) held-to-maturity investments or (c) financial
assets at fair value through surplus or deficit.
Definition of a financial guarantee contract
A financial guarantee contract is a contract that requires the issuer 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 original or modified terms of a debt instrument.
Definitions relating to recognition and measurement
The amortized cost of a financial asset or financial liability is the amount at
which the financial asset or financial liability is measured at initial
recognition minus principal repayments, plus or minus the cumulative
amortization using the effective interest method of any difference between
that initial amount and the maturity amount, and minus any reduction
(directly or through the use of an allowance account) for impairment or
uncollectibility.
The effective interest method is a method of calculating the amortized cost of
a financial asset or a financial liability (or group of financial assets or
financial liabilities) and of allocating the interest revenue or interest expense
over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments or receipts through the expected
life of the financial instrument or, when appropriate, a shorter period to the
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IPSAS 29
PUBLIC SECTOR