My question/doubt is related to classification of assets in IFRS9.
Can security with the same asset class have different classification, example: can listed "IBMSTOCK" be classified as FVTPL and listed "APPLESTOCK" be classified as FVOCI for the same entity/fund? or does this classification happen at asset class level example : All equity stock for an entity would be classified as FVTPL based on model test and SPPI test of that entity ?
Can I classify an equity stock for this financial reporting period as FVTPL and then FVOCI for the next financial year ?
Hi, yes you can treat these two holdings differently, but the FVOCI measurement for equity instruments is an irrevocable option at initial recognition only , see below:
Thanks a lot for the prompt response. So, if I understand your correctly you meant that I can treat IBMSTOCK with FVTPL and APPLESTOCK with FVOCI at the same time, can you also answer my second part of the earlier question (below)
Can I classify an equity/bond instrument for this financial reporting period as FVTPL and then FVOCI/HTM for the next financial year ?
Under IFRS 9.B5.7.1 the FVOCI election is made 'on an instrument-by-instrument (ie share-by-share) basis'. As I read this, you are allowed to designate only some of the shares that you buy at FVOCI and have the rest classified at FVTPL - even if they are issued by the same company.
An interesting idea, guess you'd have a pretty sizeable investment in IBM for that to be worthwhile, and to think carefully about which category you sell, if not all of it.