Derecognition of Financial Assets (IFRS

9)
Last updated: 30 October 2020

Derecognition is the removal of a previously recognised financial asset from an entity’s

statement of financial position. In general, IFRS 9 criteria for derecognition of a
financial asset aim to answer the question whether an asset has been effectively ‘sold’
and should be derecognised or whether an entity obtained a kind of financing against
this asset and simply an additional financial liability should be recognised. See also
separate page on derecognition of financial liabilities.

Derecognition criteria for financial assets are summarised in the decision tree below.
This is a very useful framework that helps go through the discussion that follows.