Categories of financial assets IAS 39
15 December 2008
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Hi, Members.
In regard to the above subject please help me to answer the following question.
One of the four categories of financial assets as classified in IAS 39, Financial Instruments: Recognition and Measurement is subject to “tainting rule”. Identify the category and explain what is tainting rule.
Thanks and Regards.
Kibona
Hi,
Tainting Rule means:
Where an entity sells or transfers more than an ‘insignificant amount’ of its held-to-maturity investments it must reclassify all of them as available-for-sale. It is then prohibited from classifying any assets as held-to-maturity for the next two full annual financial periods, until confidence in its intentions is restored.
Best Regards.
Alberto
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