Two measurement categories exist for financial liabilities: fair value through profit or loss (FVTPL) and amortised cost. Financial liabilities held for trading are measured at FVTPL, and all other financial liabilities are measured at amortised cost unless the fair value option is applied.

　　The IASB and FASB have been working on a project to replace IAS 32 and converge IFRS and US GAAP for a number of years. The ‘Financial instruments with characteristics of equity’ project (‘FICE’) resulted in a discussion paper in 2008, but has been put on hold.

　　Written by a member of the Paper P2 examining team

　　Last updated: 20 Apr 2015