CAF-6 · Chapter 2 · Question 3 of 15
Alpha Corp purchases equity shares in another company. The shares are not held for trading. According to IFRS 9, how can Alpha Corp classify this investment at initial recognition?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) It can be classified at FVPL or, by an irrevocable choice, at fair value through OCI (FVOCI).
Explanation
For equity instruments not held for trading, the default classification is FVPL, but an entity can make an irrevocable choice at initial recognition to classify them at FVOCI.
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