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Under Ind AS 109, the EXPECTED CREDIT LOSS (ECL) impairment model applies to:
AAll financial liabilities measured at amortised cost
BFinancial assets at amortised cost, financial assets at FVOCI (debt), lease receivables, contract assets, loan commitments and financial guarantee contracts
COnly loans and trade receivables — the ECL model is not used for guarantees or commitments
DAll financial instruments including equity instruments at FVOCI
Answer & Solution
Correct answer: B. Financial assets at amortised cost, financial assets at FVOCI (debt), lease receivables, contract assets, loan commitments and financial guarantee contracts
Para 5.5.1 — the ECL model applies to debt financial assets at AC or FVOCI, lease receivables, contract assets, loan commitments and financial guarantee contracts. It does NOT apply to: equity instruments (they are at FVTPL or FVOCI with no impairment), debt instruments at FVTPL, or financial liabilities (impairment-of-financial-asset concept doesn't apply to liabilities).
Related questions
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