This document outlines the initial and subsequent measurement and treatment of gains and losses for five categories of financial instruments: instruments at fair value through profit or loss are measured at fair value both initially and subsequently with changes recognized in profit or loss; held-to-maturity and loans and receivables instruments are measured at amortized cost using the effective interest method with gains and losses recognized in profit or loss; available-for-sale instruments are measured at fair value with changes recognized in other comprehensive income and recycled to profit or loss on derecognition; other financial liabilities are also measured at amortized cost using the effective interest method with gains and losses recognized in profit or loss.

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Financial Instruments (I)
Measurement of financial instruments:
An overview
Category Initial
measurement
Subsequent
measurement
Gains and losses
At fair value
through P or L
Fair value Fair value Recognized in profit or loss
Held-to-maturity Fair value plus
transaction costs
Amortized costs Recognized in profit or loss
Loans and
receivables
Fair value plus
transaction costs
Amortized costs Recognized in profit or loss
Available-for-sale Fair value plus
transaction costs
Fair value Recognized in equity. Amounts
in equity are recycled to P&L
when the asset is derecognized
Other financial
liabilities
Fair value plus
transaction costs
Amortized costs Recognized in profit or loss