Intercorporate Investment Concept Checker (Schweser Book 2 P.92 Q5)
I am confused with the answer provided.
1. Equity security must be treated as HTM asset?
2. What if the equity is treated as AFS? Can the loss be reversed under IFRS?
The Schweser Book 2 P.65 said:
“If the held-to-maturity security’s value recovers in a later period, and its recovery can be
attributed to an event (such as a credit upgrade), the impairment loss can be reversed.
Impairments of available-for-sale debt securities may be reversed under the same
conditions as impairments of held-to-maturity securities. Reversals of impairments are
not permitted for equity securities.”
Does it mean that under IFRS, both AFS/HTM debt securities can reverse its impairment loss, while both AFS/HTM equity securities can not?
Study together. Pass together.
Join the world's largest online community of CFA, CAIA and FRM candidates.