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. BankCo recognises ECL allowance on FVTOCI bonds. How is this presented?

A Reduce carrying value in balance sheet.
B Recognise loss allowance in OCI, no P&L impact.
C Recognise loss allowance in P&L but carrying amount not reduced; cumulative OCI reserve adjusted.
D Adjust cost of bonds directly.
E Recognise deferred tax only.
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