What factor is important in classifying an investment at fair value through profit or loss?
A)Whether the instrument is a debt, equity or derivative instrument.
B)Whether the instrument has a set maturity date.
C)What is the business model within which the investments are held?
D)Whether the instrument generates dividends.

Question

Quizplus · Accepted Answer

The business model within which the investments are held is the most important factor in classifying an investment at fair value through profit or loss. The other options may be relevant in determining the appropriate accounting treatment for the investment, but the business model is the primary factor.

What Factor Is Important in Classifying an Investment at Fair