BCG.1 The main changes made by IFRS 9 issued in 2009 from the 2009 Exposure Draft Financial Instruments: Classification and Measurement (the ‘2009 Classification and Measurement Exposure Draft’) were:
(a) IFRS 9 dealt with the classification and measurement of financial assets only, instead of financial assets and financial liabilities as proposed in the 2009 Classification and Measurement Exposure Draft.
(b) IFRS 9 requires entities to classify financial assets on the basis of the objective of the entity’s business model for managing the financial assets and the characteristics of the contractual cash flows. It points out that the entity’s business model should be considered first, and that the contractual cash flow characteristics should be considered only for financial assets that are eligible to be measured at amortised cost because of the business model. It states that both classification conditions are essential to ensure that amortised cost provides useful information.
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