IFRS-9 derecognition of equity instrument at FVTOCI

[Muzammil Korai]

As per IFRS-9 paragraph 5.7.10 when a financial asset classified at fair value through OCI is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
However, while reading an article on BDO's website, I came to know that the abovementioned rule applies to the debt instruments only. And accumulated gain/loss in OCI relating to equity instrument are not reclassified to profit or loss on disposal, but can be transferred to other categories within equity.
I wanted to know its authenticity. Can someone please guide me in this regard and mention the source from IFRS (if possible)?
Thanks in advance!

Link to BDO's article : https://www.bdo.com.au/en-au/content/ac ... 019/ifrs-9

[JakobLavrod]

It is correct that if you have an equity instrument classified as FVOCI, then there is no recycling to PnL. This is a hotly debated issue on what would be the optimal standard, but the rules are quite clear in this context. See:

IFRS 9.B5.7.9: Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss. However, the entity may transfer the cumulative gain or loss within equity.

[Muzammil Korai]

I think paragraph B5.7.9 relates to the fair value gain or loss relating to financial liabilities, not financial assets (equity instruments). Please correct me if I am wrong.

[DJP]

The paragraph you are looking for is IFRS 9 B5.7.1

Cheers

[Muzammil Korai]

Yes Sir, you are right. Got it. Thank you!

[JakobLavrod]

Thank you for the correction DJP! Mistake on my part!