Held For Trading

Definition

Held for trading in the context of IFRS 9 is an accounting term 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

• IFRS 9 Glossary

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