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HMRC internal manual

Corporate Finance Manual

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HM Revenue & Customs
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Accounting for corporate finance: International Financial Reporting Standards: IAS 39: classification of financial assets and financial liabilities

Financial assets and financial liabilities

Financial assets and financial liabilities are defined at CFM21060.

Assets

IAS 39 requires financial assets to be classified in one of the following categories:

  • Financial assets at fair value through profit or loss (FVTPL) - CFM21530 onwards;
  • Held to Maturity (HTM) investments - CFM21560;
  • Loans and receivables (L&R) - CFM21580; and
  • Available for Sale (AFS) - CFM21590.

These categories are used to determine how a particular financial asset is recognised and measured in the financial statements. There is more detail on this at CFM21610.

Liabilities

IAS 39 recognises two classifications of financial liabilities:

  • Financial liabilities at fair value through profit and loss (FVTPL) - CFM21530 onwards
  • Others (for details of how these are measured see CFM21720).

These categories are used to determine how a particular financial asset is recognised and measured in the financial statements. There is more detail on this at CFM21610.

Financial liabilities that are accounted for as hedged items in a fair value hedge are subject to the hedge accounting requirements - see CFM27000+.