In disclosing information about how a financial asset or financial liability meets the conditions to be classified as 'at fair value through profit and loss',an entity must have a narrative description of how this designation is consistent with:
A) industry practice.
B) its own documented investment strategy.
C) ASIC's requirements.
D) the law.

Question

Quizplus · Accepted Answer

The disclosure about why a financial asset or liability is classified as at fair value through profit and loss should include a description of how the designation fits into the entity's documented investment strategy. This option ensures the entity is disclosing why it has made the classification and how it aligns with their investment strategy. Other options, such as industry practice or ASIC's requirements, may have less relevance to the specific entity's practices and investment strategy. The law would be an overarching requirement, but it may not provide enough detail about how a specific asset or liability should be classified.

In Disclosing Information About How a Financial Asset or Financial