S1: Under Ind AS 109, financial assets are classified into three measurement categories: Amortized Cost, Fair Value Through Other Comprehensive Income (FVTOCI), and Fair Value Through Profit or Loss (FVTPL). S2: Equity investments are always measured at Amortized Cost. Which statement(s) is/are correct? MCQ with Answer and Explanation
S1: Under Ind AS 109, financial assets are classified into three measurement categories: Amortized Cost, Fair Value Through Other Comprehensive Income (FVTOCI), and Fair Value Through Profit or Loss (FVTPL). S2: Equity investments are always measured at Amortized Cost. Which statement(s) is/are correct?
A. S2 only
B. S1 only
C. Both S1 and S2
D. Neither S1 nor S2
Answer: Option B
Solution (By JKSSB Mock Tests)
S1 is correct as per Ind AS 109. S2 is incorrect because equity investments do not have contractual cash flows that are solely payments of principal and interest (SPPI), so they cannot be measured at Amortized Cost; they are measured at FVTPL or FVTOCI.
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