Accounting for Investments, Volume 2: Fixed Income Securities and Interest Rate Derivatives—A Practitioner's Guide

AMENDMENTS TO IAS 39 & IFRS 7 (OCTOBER 2008)

Reclassification out of fair value through profit or loss category

This amendment permits an entity to reclassify non-derivative financial assets out of the fair value through profit or loss category in certain circumstances. However non-derivative financial assets designated at fair value through profit or loss by the entity upon initial recognition cannot be reclassified.

The amendment also permits an entity to transfer from the available-for-sale category to the loans and receivables category a financial asset that would have met the definition of loans and receivables (if the financial asset had not been designated as available-for-sale), if the entity has the intention and ability to hold that financial asset for the foreseeable future.

An entity:

a) Shall not reclassify a derivative financial instrument into or out of the fair value through profit or loss category while it is held or issued;

b) Shall not reclassify any financial instrument out of the fair value through profit or loss category if upon initial recognition it was designated by the entity as at fair value through profit or loss; and

c) May, if a financial asset is no longer held for the purpose of selling or repurchasing it in the near term (notwithstanding that the financial asset may have been acquired or incurred principally for the purpose of selling or repurchasing it in the near term), reclassify that financial asset out of the fair value through profit or loss ...