Classification, Recognition and Measurement of Financial Assets

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CLASSIFICATION In accordance with IAS 39, financial assets are to be classified in the following four categories: 1. Financial assets at fair value through profit or loss; 2. Held-to-maturity investments; 3. Loans and receivables; 4. Available-for-sale financial assets. The classification depends on the purpose for which assets are bought and held. Management decides on their initial classification at the time of initial recognition, subsequently checking that it still applies at the end of each reporting period. CHARACTERISTICS The main characteristics of the assets mentioned above are as follows:

• FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS. These are made up of two sub-categories:
  • Financial assets held specifically for trading purposes
  • Financial assets to be measured at fair value under the fair value option designation. This category also includes all financial investments, other than equity instruments that do not have a p (...) Read more? Sign up for free
    

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