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CA Final · Financial Reporting · Classification and Measurement of Financial Assets and Financial Liabilities

Under Ind AS 109, which of the following financial liabilities is NOT subsequently measured at amortised cost as the default measurement basis?

A derivative that is a liability is not measured at amortised cost. Ind AS 109 makes amortised cost the default for financial liabilities but excepts those at fair value through profit or loss, expressly including derivative liabilities, which are subsequently measured at fair value.

  1. AA trade payable that is not designated at FVTPL
  2. BA bank term loan taken by an entity with no FVTPL designation
  3. CA derivative that is a liabilityCorrect
  4. DDebentures issued and not designated at FVTPL

Explanation

Paragraph 4.2.1 makes amortised cost the default but excepts financial liabilities at FVTPL, expressly including derivatives that are liabilities, which are measured at fair value. Trade payables, term loans and debentures with no designation stay at amortised cost.

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