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    Question

    BankCo holds debt securities: тАв Portfolio A:

    Government bonds held to collect contractual interest/principal. тАв Portfolio B: Corporate bonds held to collect and occasionally sell to manage liquidity. тАв Portfolio C: Equity investments in FinTech start-up for strategic relationship. Which classification is most appropriate?
    A A = Amortised Cost; B = FVTOCI; C = FVTPL Correct Answer Incorrect Answer
    B A = FVTOCI; B = Amortised Cost; C = Amortised Cost Correct Answer Incorrect Answer
    C A = Amortised Cost; B = Amortised Cost; C = FVTOCI Correct Answer Incorrect Answer
    D A = FVTPL; B = FVTPL; C = FVTOCI Correct Answer Incorrect Answer
    E A = Amortised Cost; B = FVTOCI; C = FVTOCI (if irrevocable election made) Correct Answer Incorrect Answer

    Solution

    Portfolio A meets SPPI test and held-to-collect тЖТ amortised cost. Portfolio B = hold-to-collect and sell тЖТ FVTOCI. Equities by default тЖТ FVTPL, but irrevocable election at inception allows FVTOCI.

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