Gains and losses on available-for-sale financial assets are recognised directly in equity until the financial asset is derecognised. Upon derecognition, the cumulative gain or loss previously recognised is:
A) set-off against the relevant financial asset.
B) recognised in profit or loss.
C) transferred to a revaluation reserve account in equity.
D) charged against a provision for gains and losses account.

Question

Quizplus · Accepted Answer

Gains and losses on available-for-sale financial assets are recognised directly in equity until the financial asset is derecognised. Upon derecognition, the cumulative gain or loss previously recognised is recognised in profit or loss.

Gains and Losses on Available-For-Sale Financial Assets Are Recognised Directly