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For those entities applying IFRS or FRS 101 with a period of account beginning before 1 January 2018 refer to IAS 39 for the recognition and measurement of financial instruments at CFM21520+

Financial liabilities

Financial liabilities are defined at CFM21060.

Amortised cost

IFRS 9 requires financial liabilities to be classified as amortised cost except where the specific exclusions below apply.

Fair value through profit or loss

»Ê¹ÚÌåÓýapp following financial liabilities should be classified as FVTPL:

• Financial liabilities that are held for trading (the liability is acquired for the purpose of selling in the short term);
• Financial liabilities that are derivatives (guidance on accounting for derivatives can be found at CFM24000+; or
• Where a company has made an irrevocable election to designate the financial liability as FVTPL when doing so reduces a measurement or recognition inconsistency (sometimes referred to as an accounting mismatch).

Specific exemptions

IFRS 9 contains specific rules for the accounting for:

• financial guarantee contracts;
• commitments to provide below market rate loans; and
• contingent consideration recognised by an acquirer in a business combination.