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      Question

      BankCo holds debt securities: • Portfolio A:

      Government bonds held to collect contractual interest/principal. • Portfolio B: Corporate bonds held to collect and occasionally sell to manage liquidity. • 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 → amortised cost. Portfolio B = hold-to-collect and sell → FVTOCI. Equities by default → FVTPL, but irrevocable election at inception allows FVTOCI.

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