Burton Howard, CFA, is an equity analyst with Maplewood Securities. Howard is preparing a research report on Confabulated Materials, SA, a publicly traded company based in France that complies with IFRS 9. As part of his analysis, Howard has assembled data gathered from the financial statement footnotes of Confabulateds 2018 Annual Report and from discussions with company management. Howard is concerned about the effect of this information on Confabulateds future earnings. Information about Confabulateds investment portfolio for the years ended 31 December 2017 and 2018 is presented in Exhibit 1. As part of his research, Howard is considering the possible effect on reported income of Confabulateds accounting classification for fixed income investments. Exhibit 1 Confabulateds Investment Portfolio ( Thousands) Characteristic Bugle AG Cathay Corp Dumas SA Classification FVPL FVOCI Amortized cost Cost* 25,000 40,000 50,000 Market value, 31 December 2017 29,000 38,000 54,000 Market value, 31 December 2018 28,000 37,000 55,000 * All securities were acquired at par value. In addition, Confabulateds annual report discusses a transaction under which receivables were securitized through a special purpose entity (SPE) for Confabulateds benefit