CERTYNEX IFRS ACADEMY

Pi SA has sold a portfolio of loans to a fund. It has neither transferred nor kept substantially all the risks and rewards, but the fund can sell the whole portfolio to an unrelated third party, on its own initiative and without additional restrictions. What is the conclusion?

Pi has not kept control: it derecognises the loans.

Pi keeps the loans on the balance sheet, for lack of having transferred substantially all the risks and rewards.

Pi derecognises the loans after the fund has actually resold the portfolio to a third party.

Pi keeps the loans on the balance sheet to the extent of its continuing involvement.