Instruments within the impairment model

Learning objectives

• Identify the instruments subject to a loss allowance for expected credit losses (amortised cost, debt instruments at FVOCI, lease receivables, contract assets) and those that are not (equity instruments).L1

Normative references

• IFRS 9 §5.5.1A loss allowance for expected credit losses is recognised on financial assets measured in accordance with para. 4.1.2 (amortised cost) or 4.1.2A (FVOCI), lease receivables, contract assets, and loan commitments and financial guarantee contracts to which the impairment requirements apply under paras. 2.1(g), 4.2.1(c) or 4.2.1(d). Investments in equity instruments, which fall under neither para. 4.1.2 nor para. 4.1.2A, are therefore not covered.

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

2 questions

• The impairment model based on expected credit losses does not apply to equity instruments.L1
• Which of these instruments is not subject to the loss allowance for expected credit losses?L1