1.

In this case Airbus can use the fair value option to eliminate or significantly reduce a
measurement or recognition inconsistency (accounting mismatch), because under their accounting
policy it will be measured at fair value with gains or losses recognized in Profit and loss and in
this case it will agreed to concept of IFRS 9 which is “An entity may, at initial recognition,
irrevocably designate a financial asset or liability that would otherwise have to be measured at
amortised cost or fair value through other comprehensive income to be measured at fair value
through profit or loss if doing so would eliminate or significantly reduce a measurement or
recognition inconsistency (sometimes referred to as an ‘accounting mismatch’) or otherwise
results in more relevant information.”
https://www.ifrs.org/issued-standards/list-of-standards/ifrs-9-financial-instruments/
https://www.pwc.com/gx/en/audit-services/ifrs/publications/ifrs-9/ifrs-9-understanding-the-
basics.pdf
2. In this case the fair value through comprehensive income can measure the equity securities,
because according to IFRS 9 “Entity irrevocably elects at initial recognition to recognize only
dividend income on a qualifying investment in profit and loss, with no recycling of changes in
fair value accumulated in equity through OCI.” Even if it it is non-trading equity securities fair
value through comprehensive income can be used because According to IFRS 9 “under which
equity instruments that are not traded in an active market and cannot be reliably measured at
fair value are measured at cost, as well as derivative instruments that are linked to and settled
by the delivery of such instruments. This exemption has been removed in IFRS 9”
https://www.pwc.com/gx/en/audit-services/ifrs/publications/ifrs-9/ifrs-9-understanding-the-
basics.pdf
https://www.pwc.com/gx/en/audit-services/ifrs/publications/ifrs-9/ifrs-9-understanding-the-
basics.pdf

‘
https://finlearnhub.com/2018/09/25/ifrs-9-how-to-reduce-eliminate-an-accounting-mismatch/ (ehe)

The new standard is based on the concept that financial assets should be classified and measured at fair
value, with changes in fair value recognized in profit and loss as they arise (“FVPL”), unless restrictive
criteria are met for classifying and measuring the asset at either Amortized Cost or Fair Value Through
Other Comprehensive Income (“FVOCI”). https://www.pwc.com/gx/en/audit-
services/ifrs/publications/ifrs-9/ifrs-9-understanding-the-basics.pdf