Chapter 9
Investments
478
d) When amortizing the discount or premium on bonds, what is the main difference(s)
between the issuer’s and the investor’s recording?
e) Under IFRS, if the debt investment is for the purpose of making short-term profits instead
of being held until maturity, investors are allowed to use fair value through profit and loss
method. Although investment classification is strictly based on management’s intention at
the purchase date, what are some of the reasons that an investor may generally prefer the
fair value through profit and loss method over the amortized cost method?
