Consider the following statements: I. If the financial asset is reclassified from amortized cost to FVOCI, the financial asset is measured at fair value at the reclassification date and a new effective interest rate must be determined based on the new carrying amount or fair value at reclassification date. II. The difference between previous carrying amount and fair value of a financial asset when reclassified from amortized cost to FVPL is recognized in profit or loss. III. The cumulative gain or loss previously recognized in other comprehensive income is reclassified to profit or loss at reclassification date when the financial asset is reclassified from FVOCI to FVPL. IV. The original effective rate is not adjust for financial assets that are reclassified from FVPL to FVOCI. State whether the foregoing statements are incorrect. a. I and II are incorrect b. II and III are incorrect c. I and IV are incorrect d. All the statements are incorrect
Consider the following statements:
I. If the financial asset is reclassified from amortized cost to FVOCI, the financial
asset is measured at fair value at the reclassification date and a new effective interest
rate must be determined based on the new carrying amount or fair value at
reclassification date.
II. The difference between previous carrying amount and fair value of a financial asset
when reclassified from amortized cost to FVPL is recognized in profit or loss.
III. The cumulative gain or loss previously recognized in other comprehensive income
is reclassified to profit or loss at reclassification date when the financial asset is
reclassified from FVOCI to FVPL.
IV. The original effective rate is not adjust for financial assets that are reclassified from
FVPL to FVOCI.
State whether the foregoing statements are incorrect.
a. I and II are incorrect
b. II and III are incorrect
c. I and IV are incorrect
d. All the statements are incorrect
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