Ok so the financial instrument to classify and measure is a debt instrument.
Based on the overall business, not instrument-by-instrument
- How the entity is run
- The objective of the business model as determined by key management personnel (KMP) (per IAS 24 Related Party Disclosures).
The objective of the ‘hold to collect’ business model is to hold financial assets to collect their contractual cash flows, rather than with a view to selling the assets to generate cash flows. However, there is no requirement that financial assets are always held until their maturity, and IFRS 9 identifies some sales that are considered consistent with the ‘hold to collect’ business model irrespective of their frequency and significance. This is in contrast to the held to maturity category under IAS 39 which penalised entities for sales in all but exceptional circumstances (commonly known as ‘tainting rules’). Nevertheless, it is expected that sales would be incidental to this business model and consequently an entity will need to assess the nature, frequency and significance of any sales occurring.