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HMRC internal manual

Corporate Finance Manual

HM Revenue & Customs
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Accounting for corporate finance: International Financial Reporting Standards: IAS 39: classification of financial assets: available for sale (AFS) assets

Available for sale assets

Available for sale (AFS) is a residual category for non-derivative financial assets that do not fall into any of the previous three categories. An asset may also be designated as AFS on initial recognition.

The balance sheet treatment, though, is the same as that for FVTPL items, in other words they are measured at fair value. However, the fair value changes are taken directly to equity from which they are later ‘recycled’ into the income statement on the occasion of a sale, realisation or impairment of the asset concerned. Foreign exchange gains and losses arising on monetary AFS assets are always recognised in the income statement. Interest or dividend income on AFS assets is also recognised in the income statement on a level yield basis.