CERTYNEX IFRS ACADEMY

When the time value of money element of an asset is modified, how does the entity assess the contractual cash flows?

It compares the nominal interest rate with the market rate and concludes according to the difference found.

It considers that the cash flows remain SPPI as long as the modification is provided for in the contract.

It assesses the modification at each reporting date and reclassifies the asset in case of a difference.

It compares them with those of a benchmark instrument; if they could be significantly different, the asset is at FVTPL.