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 penalized 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.
Only financial assets that meet the SPPI test and are held in a ‘hold to collect’ business model can be classified at amortised cost. A typical example would be trade receivables or intercompany loans where the entity intends to collect the contractual cash flows and has no intention of selling those financial assets.« Go to IFRS Jargon