Which of the following categories of financial instruments is NOT subsequently measured at amortised cost?Question 5Select one:a.Held-to-maturity investments.b.Other financial liabilities.c.Available-for-sale financial assets.d.Loans and receivables.
Question
Which of the following categories of financial instruments is NOT subsequently measured at amortised cost?Question 5Select one:a.Held-to-maturity investments.b.Other financial liabilities.c.Available-for-sale financial assets.d.Loans and receivables.
Solution
The category of financial instruments that is NOT subsequently measured at amortised cost is:
c. Available-for-sale financial assets.
This is because available-for-sale financial assets are instead measured at fair value. Changes in the fair value of available-for-sale financial assets are usually recognised in other comprehensive income until the investment is derecognised or until the investment is determined to be impaired. At that time, the cumulative gain or loss previously recognised in other comprehensive income is reclassified to profit or loss.
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