1. In each of the following cases, state (with reason) whether the financial asset should be derecognised in the books of entity XYZ. a) XYZ transfers a loan it holds to a bank but stipulates that the bank cannot sell or pledge the loan. This is to protect the customer to whom the loan was originally made. b) XYZ transfers a financial asset to ABC on terms that stipulates that XYZ can repurchase the asset before expiry of specified period at market value at the date of repurchase. c) XYZ transfers financial asset to ABC on terms that stipulates that XYZ must repurchase the asset before the expiry of a specified period and that repurchase is at the value at transfers date plus interest at a fixed rate on that value. d) XYZ sells short terms receivables to ABC and provides a guarantee with that sale to pay for any credit losses that may be incurred on the receivables as a result of the failure of the debtor to pay when due. 2. State whether the following financial asset would be measured at amortized cost or fair value in accordance to IFRS 9. a) Joe Blogs PLC hold investments to collect their contractual cash flows of principal and interest but would sell an investment in particular circumstances. b) Joe Blogs PLC's business model is to purchase portfolios of loans. If payment on the loan is not made on timely basis, the entity contacts the debtor by phone, email or post to extract the cashflows. c) Joe Blogs PLC holds bonds in various currencies with stated maturity dates and intends to hold the bonds till maturity. Payments or principal and interests to the entity are linked to the bond issuer's net income performance. 1. In each of the following cases, state (with reason) whether the financial asset should be derecognised in the books of entity XYZ. a) XYZ transfers a loan it holds to a bank but stipulates that the bank cannot sell or pledge the loan. This is to protect the customer to whom the loan was originally made. b) XYZ transfers a financial asset to ABC on terms that stipulates that XYZ can repurchase the asset before expiry of specified period at market value at the date of repurchase. c) XYZ transfers financial asset to ABC on terms that stipulates that XYZ must repurchase the asset before the expiry of a specified period and that repurchase is at the value at transfers date plus interest at a fixed rate on that value. d) XYZ sells short terms receivables to ABC and provides a guarantee with that sale to pay for any credit losses that may be incurred on the receivables as a result of the failure of the debtor to pay when due. 2. State whether the following financial asset would be measured at amortized cost or fair value in accordance to IFRS 9. a) Joe Blogs PLC hold investments to collect their contractual cash flows of principal and interest but would sell an investment in particular circumstances. b) Joe Blogs PLC's business model is to purchase portfolios of loans. If payment on the loan is not made on timely basis, the entity contacts the debtor by phone, email or post to extract the cashflows. c) Joe Blogs PLC holds bonds in various currencies with stated maturity dates and intends to hold the bonds till maturity. Payments or principal and interests to the entity are linked to the bond issuer's net income performance
