What should an investment in a debt investment be classified as when management has not specifically identified the classification? That is to say, in the absence of an election, what is the default category?

Question

Quizplus · Accepted Answer

In the absence of a specific election by management, the default classification for a debt investment is "At fair value through profit or loss." This is because, under IFRS 9 Financial Instruments, if an entity does not designate a financial asset as measured at amortized cost or at fair value through other comprehensive income (OCI), it defaults to being classified and measured at fair value through profit or loss. This classification reflects the principle that financial assets should be measured at their fair value, with changes in fair value recognized in profit or loss, unless specific criteria are met for the other categories.

What Should an Investment in a Debt Investment Be Classified