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Under Ind AS 109, an entity's BUSINESS MODEL for managing financial assets is:
AA matter of fact, typically observable from how groups of financial assets are actually managed — not merely an assertion
BA management policy that can be elected anew each reporting period
CAn accounting choice that must be applied at the individual instrument level
DDetermined exclusively by the documented investment policy
Answer & Solution
Correct answer: A. A matter of fact, typically observable from how groups of financial assets are actually managed — not merely an assertion
Para 4.1.1 / B4.1.2 — the business model is a MATTER OF FACT, evidenced by how performance is evaluated and reported to KMP, how risks are managed, and how managers are compensated. It's NOT a free policy election. It's determined at a level reflecting how groups of assets are managed (not instrument-by-instrument), and an entity may have multiple business models for different portfolios.
Related questions
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