Aviation Inc. decided that they would sale the bond within 90 days. Assume that Aviation now has to adjust their financial statements and account for the investment as available for sale. Write a memo detailing the impact that the change will have on each financial statement and site and explain the accounting codification that explains how this change should be accounted for in the financial statements. You must show the journal entry that will be made to adjust the financials statements.

As per IFRS 32, if the entity holds a Financial Instrument as held for maturity, then Financial Instruments shall be treated as Financial Instruments amortised at cost and shall be recognised at cost.

In the present case, the entity decides to reclassify its financial instruments from Instruments held for maturity to financial instruments held for sale within next 90 days

There will be two implications for the same

a) The financial instruments shall be classified as Financial Asset - FVTPL, i.e. Fair value measured through Profit and Loss or FVTOCI, i.e. Fair Value measured through Other Comprehensive Income. In both the cases, financial asset shall be remeasured at Fair value as on the date of reporting period end with the only difference being that in FVTPL, gain/loss on re-measurement should be routed through Profit and Loss A/c where as in FVTOCI, gain/loss on re-measurement should be routed through Other Comprehensive Income.

b) Since, financial instruments shall be sold within next 90 days, Financial Assets shall be reclassified as Current Assets.

Check the document attached