After IFRS 9 Financial Instruments amended the
accounting treatment of equity investments, the International
Accounting Standards Board (IASB) decided that such investments
are, by default, to be measured at fair value with value changes
recognised in the profit and loss (P&L) column.
However, entities can, if they choose, recognise value changes
as fair value through other comprehensive income (OCI or FVOCI).
Such a decision, which is irrevocable, must happen at the start of
the investment. If this option is taken, impairment losses cannot
be recognised in P&L, nor will there be any recycling of gains
or losses through P&L upon derecognition.
Stakeholders have expressed concerns over these new
requirements, as they could lead to fewer investments in long-term
equity instruments. They also worry because the recognition of fair
value changes in P&L may not reflect the business model of
long-term investors due to possible volatility, and because the
option to
