Continuing involvement in derecognised assets

Learning objectives

• Explain the disclosures about continuing involvement in assets derecognised in their entirety: amounts, maximum exposure to loss and repurchase.L3
• Assess whether a retained right or obligation constitutes continuing involvement to be documented.L3

Normative references

• IFRS 7 §42EFor each type of continuing involvement in assets derecognised in their entirety, the entity discloses as a minimum the carrying amount and the line items of the assets and liabilities that represent the involvement, their fair value, the maximum exposure to loss and how it is determined, the undiscounted cash outflows that would or may be required to repurchase the assets, a maturity analysis of those outflows, and supporting qualitative information.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

1 question

• Zénith SA sold loans and derecognised them in their entirety. The contract leaves it with an option to repurchase these loans at a price set at 102% of their nominal value, different from their fair value on the day of repurchase (case facts). Is the option a continuing involvement to be documented?L3