Held For Trading
From Open Risk Manual
Contents
Definition
Held for trading in the context of IFRS 9 is an accounting term[1] that denotes a financial asset or liability that:
- is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;
- on initial recognition is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or
- is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument)
Examples
Financial liabilities held for trading include:
- derivative liabilities that are not accounted for as hedging instruments;
- obligations to deliver financial assets borrowed by a short seller (ie an entity that sells financial assets it has borrowed and does not yet own);
- financial liabilities that are incurred with an intention to repurchase them in the near term (eg a quoted debt instrument that the issuer may buy back in the near term depending on changes in its fair value); and
- financial liabilities that are part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent pattern of short-term profit-taking.
Usage
Held for trading liabilities are accounted for at Fair Value through Profit or Loss FVPL
See Also
References
- ↑ IFRS Standard 9, Financial Instruments
