No reclassification of financial liabilities

Learning objectives

• Recognise that a financial liability is not reclassified after initial recognition.L1

Normative references

• IFRS 9 §4.4.2Financial liabilities are not reclassified.

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

2 questions

• When its funding strategy changes, the entity reclassifies its financial liabilities in the same way as its financial assets.L1
• After a change in its funding policy, Nu SA now manages its debt with a short-term trading purpose. It wonders whether it must reclassify its borrowing, measured at amortised cost, to fair value through profit or loss. Which answer applies?L1