Classification and Measurement: Limited Amendments to IFRS 9

CLASSIFICATION AND MEASUREMENT: LIMITED AMENDMENTS TO IFRS 9 (PROPOSED AMENDMENTS TO IFRS 9 (2010))
Paragraphs B5.7.1A and B5.7.2A are added.
Gains and losses (section 5.7)
...
B5.7.1A Paragraph 4.1.2A requires instruments with contractual terms that give rise to
cash flows that are solely payments of principal and interest on the principal
amount outstanding, and that are held in a business model in which the assets
are managed both in order to collect contractual cash flows and for sale, to be
measured at fair value through other comprehensive income. This
measurement presents information in profit or loss as if the financial assets are
measured at amortised cost, while measurement in the statement of financial
position will reflect the fair value of the financial assets. Gains or losses, other
than those recognised in profit or loss in accordance with paragraph 5.7.1A,
shall be recognised in other comprehensive income. When these financial assets
are derecognised, cumulative gains or losses previously recognised in other
comprehensive income shall be reclassified to profit or loss. This will reflect the
gain or loss that would have been recognised in profit or loss upon
derecognition if the financial asset was measured on an amortised cost basis.
...
B5.7.2A For the purpose of recognising foreign exchange gains and losses under IAS 21, a
financial asset measured at fair value through other comprehensive income in
accordance with paragraph 4.1.2A is treated as a monetary item. Accordingly,
such a financial asset is treated as if it were carried at amortised cost in the
foreign currency. Exchange differences resulting from changes in amortised
cost are recognised in profit or loss and other changes in the carrying amount
are recognised in accordance with paragraph 5.7.1A.
Paragraph B5.7.3 is amended. New text is underlined and deleted text is struck through.
B5.7.3 Paragraph An equity investment measured at fair value through other
comprehensive income in accordance with paragraph 5.7.5 permits an entity to
make an irrevocable election to present in other comprehensive income changes
in the fair value of an investment in an equity instrument that is not held for
trading. Such an investment is not a monetary item. Accordingly, the gain or
loss that is presented in other comprehensive income in accordance with
paragraph 5.7.5 includes any related foreign exchange component.
33
� IFRS Foundation