Ind AS 109 mandates financial instruments that are classified as fair value through profit or loss account to be fair valued whenever the financial statements are prepared. This ipso facto means that for all the listed entities, fair valuation of such financial instruments should be performed on a quarterly basis due to the listing requirements. Below is the partial list of financial instruments that should be valued on a fair value basis at every reporting period.

  1. Equity investments
  2. Debt securities (other than the ones classified as amortised cost)
  3. All derivative contracts including equity derivatives, interest rate derivatives, commodity derivatives, foreign exchange derivatives and credit derivatives
  4. Financial guarantee contracts
  5. Loan commitments
  6. Pre-payment features affecting the fair value of long term loans payable
  7. Interest in subsidiaries, associates and joint ventures which are not valued at cost
  8. Preference shares – convertible preference shares, cumulative preference shares, non-cumulative preference shares, compulsorily convertible cumulative preference shares, compulsorily convertible non-cumulative preference shares, preference shares with a put option and call option
  9. Long term security deposits – interest bearing security deposits, interest free security de-posits, interest bearing security deposits having fixed maturity, interest free security de-posits having fixed maturity
  10. Long term loans to subsidiaries, joint ventures and associates which are given at a con-cessional rate of interest or zero percentage
  11. Debentures – redeemable convertible debentures, redeemable non-convertible debentures, either with or without put and call options
  12. Term loans from banks where the transaction costs are written off in an earlier period

Contact:; Mobile: +919444025255