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PFRS 9 Financial Instruments Summary

1. Financial assets are initially measured at fair value plus transaction costs directly attributable to acquiring the asset. 2. After initial recognition, financial assets are measured either at fair value through profit or loss, fair value through other comprehensive income, or amortized cost depending on the entity's business model for managing the assets and the contractual cash flow characteristics of the assets. 3. Debt securities that are held to collect contractual cash flows, where those cash flows are solely payments of principal and interest, are measured at amortized cost. Debt securities held for both collecting contractual cash flows and selling are measured at fair value through other comprehensive income.

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36 views1 page

PFRS 9 Financial Instruments Summary

1. Financial assets are initially measured at fair value plus transaction costs directly attributable to acquiring the asset. 2. After initial recognition, financial assets are measured either at fair value through profit or loss, fair value through other comprehensive income, or amortized cost depending on the entity's business model for managing the assets and the contractual cash flow characteristics of the assets. 3. Debt securities that are held to collect contractual cash flows, where those cash flows are solely payments of principal and interest, are measured at amortized cost. Debt securities held for both collecting contractual cash flows and selling are measured at fair value through other comprehensive income.

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Ella Mae
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PFRS 9: FINANCIAL INSTRUMENTS Debt Security

any security that represents a creditor


Initial Measurement of Financial Asset relationship with an entity. It has a maturity date and a
measure at FV plus transaction costs that are maturity value. (corporate bonds, BSP treasury bills,
directly attributable to the acquisition of the FA. commercial papers and other debt instruments with
maturity)
Transaction costs that are directly attributable to
the acquisition of the FA shall be capitalized as cost of Financial Asset At FVOCI
the FA. an entity make a revocable election to present in
Subsequent Measurement other comprehensive income or OCI subsequent changes
after the initial recognition and entity shall in FV of an investment in equity instruments that is not
measure FA at: held for trading.
 FV through profit/loss (FVPL) FA is measure at FV through OCI
 FV through other comprehensive income FV+ transaction cost directly attributable to the
(FVOCI) acquisition.
 Amortized cost Gain/loss on disposal of equity investment
measured at FV through OCI is recognized directly in
The measurement depends on the business retained earnings.
model of managing FA which may be realize FV
changes and to collect contractual cash flows. Debt Investment at Amortized Cost
FA shall be measured at amortized cost if both
Financial Assets at FV through Profit/Loss of the ff. conditions have met:
 FA held for trading or also known as trading  The business model is to hold the FA in
securities. order to collect contractual CF on specified
 All other investments in quoted equity date.
instruments.  The contractual CF are solely payments of
 Debt investments that are irrevocably principal and interest on the principal
designated on initial recognition as at FV amount outstanding.
through profit/loss. Debt Investment at FV through OCI
 All debt investment that do not satisfy the there are 2 conditions:
requirements for the measurement at a
amortized cost and a FV through other  The business model is achieved both by
comprehensive income. collecting contractual CF and by selling the
Financial Asset held for Trading FA.
FA is held for trading if:  The contractual CF are solely payments of
 It is acquired principally for the purpose of principal and interest on the principal
selling or repurchasing it in the near term. outstanding.
 On initial recognition, it is part of a portfolio
of identified FA that are managed together
and for which there is evidence of a recent
actual pattern of shorten-term profit taking.
 It is derivative

Equity Security
represent an ownership interest in an equity

owner share include ordinary shares, preference


shares and rights or options to acquire ownership shares.

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