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JudgmentIntermediatePublished

Question · Fair value option for liabilities

Xi SA issues a loan whose repayment is indexed to a stock index; it uses the proceeds to acquire a portfolio of securities measured at fair value through profit or loss. Measured at amortised cost, the loan would create a mismatch with the portfolio. Management is considering designating it at fair value through profit or loss. Write a short note concluding on this designation, separating case facts, rule and judgement.

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Judgment question: compare your answer with the criteria and the model explanation.

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