3.8. Financial assets measured at fair value through profit or loss

Additionally, on initial recognition, a financial asset may be irrevocably classified as measured at fair value through profit or loss (option to measure at fair value through profit or loss) if this eliminates or significantly reduces inconsistency of measurement or recognition which would arise as a result of measuring assets or liabilities, or recognizing the related gains or losses according to different accounting principles (accounting mismatch). This option is available for debt instruments both under the “hold to collect”, and “hold to collect and sell” models.

In the consolidated financial consolidated statements of the Group, financial assets measured at fair value through profit or loss are presented as follows:

• held for trading – financial assets which:
  • have been purchased mainly to sell or redeem in the foreseeable future; or
  • upon initial recognition constitute part of a portfolio of specific financial instruments which are managed jointly and for which there is evidence that they currently generate short-term profits; or
  • are derivative financial instruments (with the exception of derivatives which are financial guarantee agreements or designated and effective hedges);
• financial assets that are not held for trading and must be measured at fair value through profit or loss – financial assets that have not passed the test of cash flow characteristics (irrespective of the business model); or financial assets classified to the residual model;
• financial assets designated to be measured at fair value through profit or loss at initial recognition (option to measure at fair value through profit or loss).

Gains or losses on assets measured at fair value through profit or loss are recognized in the income statement. Gains or losses on the measurement of a financial asset at fair value comprise the difference between the fair value of the asset and its value at amortized cost determined as at the measurement date.