CERTYNEX IFRS ACADEMY

Vega SA has acquired a bond whose redemption is indexed to the price of an equity index. It holds this portfolio to collect its contractual cash flows. Which measurement category applies?

Fair value through profit or loss: indexation to an equity price exposes the cash flows to a risk foreign to a basic lending arrangement.

Amortised cost, because the portfolio is held to collect the contractual cash flows.

Fair value through other comprehensive income, because the collection model allows the indexation difference to be taken to OCI.

Amortised cost, because the indexation is merely a way of calculating the interest.