One of the issues covered by IFRS 9 Financial Instruments (revised July 2014) is the classification and measurement of financial assets. The three possible measurement bases identified by the standard are: 

• Amortised cost. 

• Fair value through other comprehensive income. 

• Fair value through profit or loss. 

Required: 

Explain how IFRS 9 requires entities to select the appropriate measurement basis for a financial asset. You should include any options available to entities regarding classification in your explanation.