How to record FVTOCI to amortized cost reclass
Reclassifying a financial asset from FVTOCI to Amortized Cost due to a change in business model.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Financial Asset (Amortized Cost) | Asset | 105,000.00 | - |
| OCI - Fair Value Reserve | Equity | 5,000.00 | - |
| Financial Asset (FVTOCI) | Asset | - | 110,000.00 |
💡 Accountant's Note
Upon reclassification from FVTOCI to Amortized Cost, the fair value at reclassification date becomes the new carrying amount. The cumulative OCI gain/loss is removed and adjusted against the asset's value.
Practitioner & Systems Framework
💻 ERP Architecture
Manual adjustment required to clear OCI and re-base the asset in the sub-ledger.
⚠️ Audit Flags
Evidence of a significant change in the entity's business model for managing financial assets.
📄 Required Documentation
Board minutes approving the business model change and valuation at the reclassification date.
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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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