A financial asset classified as fair value through profit or loss (FVTPL) must be:
I - A derivative that is a financial guarantee contract or a hedging instrument.
II - Acquired principally for the purpose of selling it in the near term.
III - Part of a portfolio of identified instrument that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking.
IV - Designated as such upon initial recognition.
A) I, II and III.
B) I, III and IV.
C) I, II and IV.
D) I, II, III and IV.

Question

Quizplus · Accepted Answer

All the statements are correct for a financial asset classified as FVTPL. Derivatives, assets acquired for short-term selling, those part of a managed portfolio for short-term profit-taking, and those designated upon initial recognition can all be classified as FVTPL.

A Financial Asset Classified as Fair Value Through Profit or Loss