TokyoBBB Wrote: ------------------------------------------------------- > Fair Value allows you to mark up or down the > position and to take the delta to PnL. > > Held for Sale, you can mark up and down, but the > delta only goes to OCI (Equity) and doesnt touch > PnL until you dispose of the position. > > Held to Maturity, you cant mark up or down, you > can only amortise. > > Hope that helps. do you live in Tokyo dude?
Yeap.
Thanks TokyoBBB. So is “designated at fair value” the same as “held-for-trading”, in terms of recording the change of fair value in P&L? TokyoBBB Wrote: ------------------------------------------------------- > Fair Value allows you to mark up or down the > position and to take the delta to PnL. > > Held for Sale, you can mark up and down, but the > delta only goes to OCI (Equity) and doesnt touch > PnL until you dispose of the position. > > Held to Maturity, you cant mark up or down, you > can only amortise. > > Hope that helps.
TokyoBBB Wrote: ------------------------------------------------------- > Yeap. do you mind if I shoot you an email tokyobbb? i have a couple questions. i used to live there btw.
Skies Wrote: ------------------------------------------------------- > Thanks TokyoBBB. > > So is “designated at fair value” the same as > “held-for-trading”, in terms of recording the > change of fair value in P&L? > > > TokyoBBB Wrote: > -------------------------------------------------- > ----- > > Fair Value allows you to mark up or down the > > position and to take the delta to PnL. > > > > Held for Sale, you can mark up and down, but > the > > delta only goes to OCI (Equity) and doesnt > touch > > PnL until you dispose of the position. > > > > Held to Maturity, you cant mark up or down, you > > can only amortise. > > > > Hope that helps. held for trading classification are initially recorded at fair value and recorded at fair value at year-end with both unrealized/realized gains/losses hitting the income statement.
Right…so what’s the difference between HFT and “designated at fair value”, since they both record at fair value and remeasure at fair value and hit the income statement? I_Passed_Level_1 Wrote: ------------------------------------------------------- > Skies Wrote: > -------------------------------------------------- > ----- > > Thanks TokyoBBB. > > > > So is “designated at fair value” the same as > > “held-for-trading”, in terms of recording the > > change of fair value in P&L? > > > > > > TokyoBBB Wrote: > > > -------------------------------------------------- > > > ----- > > > Fair Value allows you to mark up or down the > > > position and to take the delta to PnL. > > > > > > Held for Sale, you can mark up and down, but > > the > > > delta only goes to OCI (Equity) and doesnt > > touch > > > PnL until you dispose of the position. > > > > > > Held to Maturity, you cant mark up or down, > you > > > can only amortise. > > > > > > Hope that helps. > > held for trading classification are initially > recorded at fair value and recorded at fair value > at year-end with both unrealized/realized > gains/losses hitting the income statement.
the three classifications for securities are HTM, AFS, and trading securities, the way they are recorded on the books is either at fair value or amortized cost.
Skies Wrote: ------------------------------------------------------- > Thanks TokyoBBB. > > So is “designated at fair value” the same as > “held-for-trading”, in terms of recording the > change of fair value in P&L? > > > TokyoBBB Wrote: > -------------------------------------------------- > ----- > > Fair Value allows you to mark up or down the > > position and to take the delta to PnL. > > > > Held for Sale, you can mark up and down, but > the > > delta only goes to OCI (Equity) and doesnt > touch > > PnL until you dispose of the position. > > > > Held to Maturity, you cant mark up or down, you > > can only amortise. > > > > Hope that helps. sure, you can throw me an email at blcu2003@hotmail.com
I believe what this means is, HTM is recorded as amortized value on the book, whereas AFS and trading are always recorded at their fair (market) value on the book. SchweserNotes has an excellent example to illustrate the differences of the three classes of security.
HFS, HTM, HFT isnt a form of measurement, but types of financial assets you can have. Fair value however, is a form of measurement, comparable to cost and amortisation. The form of measurement is how you value your financial assets (HTM, HFS, HFT)
Thanks everyone - the CFAI book example on Page 18 was also helpful…which I just finished reading. But this Q&A section helps the most - thanks again!
Guys, under IFRS there are the following categories: 1) At fair value through proft and loss further divided into: a) designated at fair value at the inception - those are measured initially and at following reporting date at fair value b) held for trading - those are also measured at fair value but the management has intention to dispose them shortly (in order to realize short-term gains), 2) Available for sale - measured at fair value but profit or losses are recorded in equity (here are classified all instruments not classified to other categories), 3) Held-to-maturity - those financial instruments that have determinable cash flows and redemption date and where management has intention and ability to hold them till maturity. These are valued at amortized cost using effective interest rate. Usually this is the classification. Hope it helps.
Skies Wrote: ------------------------------------------------------- > Thanks everyone - the CFAI book example on Page 18 > was also helpful…which I just finished reading. > But this Q&A section helps the most - thanks > again! you are the man Skies.