[IFRS 9 Financial Instruments replaced IAS 39. IFRS 9 applies to all items that were previously within the scope of IAS 39.]

BC60 Paragraph 9 of IAS 39 identifies and defines four categories of financial asset: (i) those held at fair value through profit or loss; (ii) held‑to‑maturity investments; (iii) loans and receivables; and (iv) available‑for‑sale financial assets.

BC61 Paragraph 24 of IFRIC 12 assumes that public‑to‑private service arrangement financial assets will not be categorised as held‑to‑maturity investments. Paragraph 9 of IAS 39 states that a financial asset may not be classified as a held‑to‑maturity investment if it meets the definition of a loan or receivable. An asset that meets the definition of a held‑to‑maturity investment will meet the definition of a loan or receivable unless:

(a) it is quoted in an active market; or

(b) the holder may not recover substantially all of its initial investment, other than because of credit deterioration.

It is not envisaged that a public‑to‑private service arrangement financial asset will be quoted in an active market. Hence the circumstances of (a) will not arise. In the circumstances of (b), the asset must be classified as available for sale (if not designated upon initial recognition as at fair value through profit or loss).