International Financial Reporting Standards (IFRS)

IFRS for Small and Medium-sized Entities (SMEs)
Section 12: Other Financial Instruments Issues

1. SME 12 applies to all financial instruments other than:
(1) Basic FI covered by SME 11
(2) Investments in subsidiaries, associates, joint ventures
(3) Employee benefits
(4) Insurance contracts
(5) Own equity instruments
(6) Leases
(7) Contingent consideration in business combination --> for acquirer

2. Basic FI --> SME 11
Complex FI --> SME 12

3. Initial measurement of Complex FI
--> at fair value
--> transaction price, not including transaction costs

4. Subsequent measurement of Complex FI

(1) Complex FI whose fair value is not available
--> measured at cost less impairment

(2) All Other Complex FI
--> measured at Fair Value through Profit or Loss

[IAS 39.9]
Four Categories of Financial Instruments (FI)

(1) FA or FL at Fair Value through Profit or Loss
(2) Held-to-Maturity investments
(3) Loans and Receivables
(4) Available-for-Sale FA

FA: Financial Asset
FL: Financial Liability

Topic 320: Investments - Debt and Equity Securities

Investments in debt securities
(1) Trading securities
(2) Held-to-Maturity securities
(3) Available-for-Sale securities

Investments in equity securities
(1) Trading securities
(2) Available-for-Sale securities