PFRS 9

Any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

• Financial asset
• Financial liability
• Financial instrument

Which of the following are exceptions for IFRS 9 application?

• Contracts to buy or sell a non-financial item that can be settled net in cash or another financial instrument as if the contracts were financial instruments
• Derivatives that are embedded in leases
• Contracts that were entered into and continue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with the entity’s expected purchase, sale or usage requirements

Which of the following loan commitments are within the scope of IFRS 9?

• Loan commitments that the entity designates as financial liabilities at fair value through profit or loss
• Loan commitments that can be settled net in cash or by delivering or issuing another financial instrument
• Commitments to provide a loan at a below-market interest rate
• All of these

When an entity transfers a financial asset, it shall evaluate the extent to which it retains __________ the financial asset.

• The rights and obligations of ownership
• Control over
• The risks and rewards of ownership
• Significant influence

When an entity continues to recognise an asset to the extent of its continuing involvement, the entity shall not recognise an associated liability.

• True
• False

Any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

• Equity Instrument
• Financial Instrument

A contract that will or may be settled in the entity’s own equity instruments and is a non-derivative for which the entity is or may be obliged to deliver a variable number of the entity’s own equity instruments, is a financial asset.

• True
• False

Contracts, and thus financial instruments, may take a variety of forms and need not be in writing.

• True
• False

An entity shall recognize a financial asset or a financial liability in its statement of financial position when, and only when, the entity becomes party to the contractual provisions of the instrument.

• True
• False

When should an entity derecognize a financial asset?

• the contractual rights to the cash flows from the financial asset expire
• it transfers the financial asset and the transfer qualifies for derecognition rules.