How to record FVTOCI equity fair value
Recognizing the fair value change of an equity investment for which the entity has made an irrevocable election to present changes in OCI.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Financial Asset (FVTOCI) | Asset | 2,200.00 | - |
| Fair Value Reserve (OCI) | Equity | - | 2,200.00 |
💡 Accountant's Note
For equity instruments not held for trading, IFRS 9 allows an irrevocable election to recognize fair value changes in other comprehensive income. These gains are not recycled to P&L on disposal.
Practitioner & Systems Framework
💻 ERP Architecture
Ensure the equity account is mapped to OCI categories rather than standard P&L gain/loss accounts.
⚠️ Audit Flags
Recycling OCI to P&L upon sale (which is prohibited under IFRS 9 for equity elections).
📄 Required Documentation
Election statement made at initial recognition and valuation supporting documents.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.
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