Held for trading

Learning objectives

• Identify whether an instrument is held for trading (sale in the near term, portfolio with a pattern of short-term profit-taking, derivative).L1, L2

Normative references

• IFRS 9Held for trading: a financial asset or liability acquired or incurred principally for the purpose of selling or repurchasing it in the near term; or part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or a derivative (except a financial guarantee contract or a designated and effective hedging instrument).

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

2 questions

• A derivative is classified among the instruments held for trading, unless it is a financial guarantee or a designated and effective hedging instrument.L1
• Tau SA manages a portfolio of bonds that it buys and resells within the year to generate short-term profits. The managers are monitored on that pattern, which has repeated in recent months. How should this portfolio be characterised against the definition of held for trading?L2