Cor pora te rep or ti n g

(1 mark)
(Application of IFRS 15 and IAS 16: 4 marks max) 
 
(Part a: 6 marks) 

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REV IS ION MO CK A ANSWERS 
K APLAN P UBLISH IN G 
21
(b) 
According to IFRS 9 
Financial Instruments
, a loss allowance should be recognised on 
financial assets that are debt instruments and which are measured at amortised cost 
or fair value through other comprehensive income. 
(1 mark) 
If the credit risk of a financial asset has not increased significantly since inception, a 
loss allowance is recognised at an amount equal to 12-month expected credit losses. 
(1 mark) 
If the credit risk of a financial asset has increased significantly since inception, a loss 
allowance is recognised at an amount equal to lifetime expected credit losses.