CERTYNEX IFRS ACADEMY

Lambda SA sells a loan portfolio but remains exposed, after the sale, to the same variability in the amounts and timing of net cash flows as before. The rights have indeed been transferred. Which conclusion should be drawn?

Lambda has kept substantially all the risks and rewards: the loans stay recognised.

The conclusion depends on the price at which the loans were sold relative to their carrying amount.

Lambda must first examine whether it has kept control, before concluding on the risks and rewards.

Lambda has transferred substantially all the risks and rewards since the rights were assigned: the loans are derecognised.