CERTYNEX IFRS ACADEMY

Kepler SA designates, under IFRS 9, an interest rate swap as a hedging instrument for the interest rate risk of a borrowing whose interest expenses fall in the financing category (case facts). This classification does not require grossing up gains and losses (case data). In which category of the statement of profit or loss does Kepler classify the gains and losses on the swap?

Financing, the category of the expenses affected by the risk the swap is used to manage.

Operating, the default category for any derivative.

Investing, since a derivative is a financial asset held.

Operating, simply because the swap is designated as a hedging instrument.