The Consolidation Process

Based on Yellow Solar Power's change in business model under IFRS 9, how would their debt instruments *most likely* be reclassified?

That's right! Under IFRS 9, if a company changes its business model from one that purely holds assets to collect contractual cash flows (suitable for classification at amortized Cost) to one that now includes selling assets before maturity, the appropriate reclassification would be to Fair Value through Profit or Loss (FVPL).

Not quite. The company's initial business model was focused on collecting contractual cash flows, suggesting the debt instruments would likely have been classified as amortized cost, not FVOCI.

Incorrect. A business model that involves selling financial assets before maturity suggests a reclassification to FVPL, not FVOCI, under IFRS 9.

Reclassified from Amortised Cost to Fair Value through Profit or Loss (FVPL)

Reclassified from Fair Value through Other Comprehensive Income (FVOCI) to Fair Value through Profit or Loss (FVPL)

Reclassified from Amortised Cost to Fair Value through Other Comprehensive Income (FVOCI)