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Manual of Accounting - Financial instruments: 2012

Derecognition of financial liabilities

In Chapter 8 - Recognition and derecognition

Manual of Accounting - Financial instruments: 2012

Author:
Global Accounting Consulting Services, PricewaterhouseCoopers LLP
Publisher:
Bloomsbury Professional
Publication Date:
2011
Law As Stated At:
1 October 2011
8.143 The derecognition rules for financial liabilities are somewhat different from those relating to financial assets. Whereas the derecognition rules for financial assets tend to focus on risks and rewards and may not lead to derecognition even though legal transfer has occurred, the derecognition rules for financial liabilities focus solely on the legal release of the contractual obligations. Consequently, the IAS 39 provisions relating to derecognition of financial liabilities in whole or in part are relatively straight forward and less subjective than those for derecognition of financial assets. The rules in IAS 39 deal with extinguishment of financial liabilities, their modification by lenders and the recognition and measurement of any gains or losses that arise from extinguishment and modification. These issues are considered in detail below. ...
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