Sbr (int/UK) Strategic Business Reporting

 

13 

Spamgate does not trade financial assets in the short-term so fair value gains 

and losses on the instrument are largely irrelevant when assessing its 

performance. Presenting the fair value loss in other comprehensive income 

therefore ensures that the statement of profit or loss best represents the 

economic returns earned during the period. 

(1 mark) 

The  Conceptual Framework states that gains and losses recognised in other 

comprehensive income should be reclassified to profit or loss in the future, 

unless there is no clear basis for determining the timing or the amount of the 

reclassification.  

(1 mark) 

According to IFRS 9, the gains and losses on Spamgate’s financial instrument 

will be reclassified to profit or loss on derecognition. This is consistent with the 

Conceptual Framework.