For question 16 of the Intercorporate investments it says that if Bulge has been classified as a held for trading security instead of an available for sale security Confabulated’s EBT would decrease by $1,000. Why is that? Don’t both held for trading securities and available for sale securities under IFRS adjust EBT based on their market price?
AFS - no impact on I/S (changes directly reported to OCI under equity).
HFT - all gains/losses reported to I/S and then flow to equity.