Question

How shall an entity subsequently measure financial liabilities? Is IFRS measurement of financial liabilities similar to that of U.S. GAAP? Also briefly describe the requirements regarding an option to designate a financial liability at fair value through profit and loss. Does U.S. GAAP allow fair value option for financial assets and liabilities? What is “own credit” issue related to financial liabilities measured at fair value through profit and loss? How does IFRS 9 address this “own credit” issue?

Answer 1

Solution:

1. Under US GAAP characterizes a monetary instrument in more specifical way and expects it to be arranged both as a money related Liability or value instrument . On the off chance that the backer risk to pay money isn't discretionary, at that point it is considered as a monetary obligation yet in the event that to convey money or other resource is discretionary, at that point it could be named budgetary instrument under US GAAP.

The grouping of monetary liabilities under IFRS 9 remains comprehensively the equivalent. Aside from money related certification contracts and advance duties that are investigated of the standard, budgetary liabilities are estimated either at FVTPL or at amortized expense.

2. Claim Credit Risk is the instability caused in benefit and loss of element because of substance choice to gauge its obligation at reasonable esteem .

For money related liabilities assigned as at FVTPL utilizing the reasonable esteem alternative, the component of increases or misfortunes attributable from changes in the substance's very own credit hazard ought to typically be perceived in OCI, with the rest of in benefit or misfortune. These sums perceived in OCI are not reused to benefit or misfortune if the risk is ever repurchased at a rebate.