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

PRESENTATION OF FINANCIAL INSTRUMENTS

An entity should present current and non-current assets, and current and non-current liabilities, as separate classifications on the face of the balance sheet, except when a presentation based on liquidity provides information that is reliable and is more relevant. In that situation all assets and liabilities should be presented broadly in order of liquidity. (IAS 1 Para 60)

Current and non-current assets

An entity shall classify an asset as current when:

a) It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;

b) It holds the asset primarily for the purpose of trading;

c) It expects to realize the asset within 12 months after the reporting period; or

d) The asset is cash or a cash equivalent (as defined in IAS 7: Cash Flow Statements) unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

An entity shall classify all other assets as non-current. (IAS 1 Para 66)

Current assets also include assets held primarily for the purpose of trading (examples include some financial assets that meet the definition of “held for trading” in IAS 39) and the current portion of non-current financial assets. (IAS 1 Para 68) Applying the same logic, trading derivative assets should also be presented as current assets. Non-hedging derivatives need not be classified as current simply because those are held for trading purposes. Applying the ...