CFM21520 | Accounting for corporate finance: International Financial Reporting Standards: IAS 39: classification of financial assets and financial liabilities

For those entities applying IFRS or FRS 101 with an accounting period beginning on or after 1 January 2018 refer to IFRS 9 for the recognition and measurement of financial instruments at CFM 21800+.

Financial assets and financial liabilities

Financial assets and financial liabilities are defined at CFM21060.

Assets

IAS 39 requires financial assets to be classified in one of the following categories:

• Financial assets at fair value through profit or loss (FVTPL) - CFM21530 onwards;

• Held to Maturity (HTM) investments - CFM21560;

• Loans and receivables (L&R) - CFM21580; and

• Available for Sale (AFS) - CFM21590.

These categories are used to determine how a particular financial asset is recognised and measured in the financial statements. There is more detail on this at CFM21610.

Liabilities

IAS 39 recognises two classifications of financial liabilities:

• Financial liabilities at fair value through profit and loss (FVTPL) - CFM21530 onwards

• Others (for details of how these are measured see CFM21720).

These categories are used to determine how a particular financial asset is recognised and measured in the financial statements. There is more detail on this at CFM21610.

Financial liabilities that are accounted for as hedged items in a fair value hedge are subject to the hedge accounting requirements - see CFM27000+.