How to record FVTOCI equity derecognition
Records the transfer of accumulated gains/losses within equity upon the sale of an equity instrument designated at FVTOCI.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| OCI - Fair value reserve | Equity | 15,000.00 | - |
| Retained earnings | Equity | - | 15,000.00 |
💡 Accountant's Note
For equity instruments designated at FVTOCI, gains and losses are never reclassified (recycled) to profit or loss. They may only be transferred within equity.
Practitioner & Systems Framework
💻 ERP Architecture
Manual equity reclassification entry following the disposal transaction.
⚠️ Audit Flags
Attempting to recycle gains from OCI to the income statement (P&L) upon disposal.
📄 Required Documentation
Trade confirmation for the sale and cumulative OCI reconciliation.
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