The default subsequent measurement base for financial liabilities is:
A) fair value using the effective interest rate.
B) amortised cost using the effective interest rate.
C) fair value through profit or loss.
D) amortised cost through profit or loss.

Question

Quizplus · Accepted Answer

According to IFRS 9, the default subsequent measurement base for financial liabilities is amortised cost using the effective interest rate. This means that the initial cost of the liability is adjusted for any amortisation and impairment losses or gains, and the resulting carrying amount is used for subsequent measurement. Fair value can be used if certain conditions are met, but it is not the default measurement base. Fair value through profit or loss and amortised cost through profit or loss are not valid options.

The Default Subsequent Measurement Base for Financial Liabilities Is