What is the basis for classification of financial assets in line with IFRS 9?

When IFRS 9 is adopted, classification of financial assets will be based on the characteristics of the financial asset and the business model under which the financial asset is held.

Is cash measured at fair value or Amortised cost?

Measurement of cash and cash equivalents, trade receivables and other short-term receivables remains unchanged; these are measured at amortised cost.

Is cash a financial asset?

Cash, stocks, bonds, mutual funds, and bank deposits are all are examples of financial assets. Unlike land, property, commodities, or other tangible physical assets, financial assets do not necessarily have inherent physical worth or even a physical form.

Is cash a financial instrument?

1. Cash Instruments. Cash instruments are financial instruments with values directly influenced by the condition of the markets.

Is cash at fair value?

Fair value estimate

The Company’s cash and cash equivalents include cash on hand, deposits in banks, certificates of deposit and money market funds. Due to their short-term nature, the carrying amounts reported in the consolidated balance sheets approximate the fair value of cash and cash equivalents.

Is cash measured at face value?

– Cash is measured at FACE VALUE.

What are examples of cash instruments?

Cash instruments include things like deposits and loans, as well as easily transferable securities. This type of instrument is directly influenced by the market, so any market fluctuations will be directly reflected in the cash asset’s value.

What are financial instruments under IFRS 9?

IFRS 9 Financial Instruments issued on 24 July 2014 is the IASB’s replacement of IAS 39 Financial Instruments: Recognition and Measurement. The Standard includes requirements for recognition and measurement, impairment, derecognition and general hedge accounting.

Is cash and cash equivalents a financial instrument?

Cash equivalents are investments securities that are meant for short-term investing; they have high credit quality and are highly liquid. Cash equivalents, also known as “cash and equivalents,” are one of the three main asset classes in financial investing, along with stocks and bonds.

What is measured at Amortised cost?

Amortised cost of financial asset or financial liability is the amount at which the asset or liability was measured upon initial recognition, minus principal repayments, plus or minus the cumulative amortisation of any premium or discount, and minus any write-down for impairment or uncollectibility.

What is the difference between Amortised cost and fair value?

Unlike amortized cost, the fair value of an asset or liability does not consider factors such as depreciation and amortization. Similarly, companies may recalculate the fair value of their assets or liabilities after a reasonable time. They do not rely on the historical cost or value of their items.

What is the difference between Fvoci and Amortised cost?

The FVOCI measurement category recognises information in Profit and Loss as if the financial asset were measured at amortised cost (the amounts that are recognised in profit or loss are the same as the amounts that would have been recognised in profit or loss if the financial asset had been measured at amortised cost).

What is the measurement Cash and cash equivalents?

Cash and cash equivalents refers to the line item on the balance sheet that reports the value of a company’s assets that are cash or can be converted into cash immediately. Cash equivalents include bank accounts and marketable securities such as commercial paper and short-term government bonds.

Is cash a financial asset under IFRS 9?

IFRS 9 identifies two different types of cash flows that might arise from the contractual terms of a financial asset: Those that are solely payments of principal and interest i.e. cash flows that are consistent with a ‘basic lending arrangement’, and. All other cash flows.

What is amortized cost in IFRS 9?

Usage in IFRS 9

Besides a measurement (value), amortized cost is also one of the three classification and measurements options for financial assets under IFRS 9, the others being fair value through other comprehensive income and fair value through profit and loss.

What are the four categories of financial assets?

financial assets at fair value through profit or loss; 2. held-to-maturity investments; 3. loans and receivables; 4. available-for-sale financial assets.

Is Cash and cash equivalents a financial instrument?

Cash equivalents are investments securities that are meant for short-term investing; they have high credit quality and are highly liquid. Cash equivalents, also known as “cash and equivalents,” are one of the three main asset classes in financial investing, along with stocks and bonds.

How do you calculate ECL for cash and cash equivalents?

ECL formula – The basic ECL formula for any asset is ECL = EAD x PD x LGD. This has to be further refined based on the specific requirements of each company, the approach taken for each asset, factors of sensitivity and discounting factors based on the estimated life of assets as required.