A designation of a financial asset that is classified as available for sale on initial recognition. This entails that such an asset is measured at fair value with changes in fair value are recognized in equity (reserves)- that is, fair value through equity/ FVTE. Available for sale (AFS) is the residual category for financial assets. An asset will be classified as such after the management has exhausted all other options of classification: the asset has not been determined to be classified as “held for trading” and also in cases where it turned out to be not eligible for the classifications of “fair value through profit and loss/ FVTPL”,“held to maturity investments” or “loans and receivables”.

Typically, available for sale includes the following:

• non-trading equity investment securities (whose fair value cannot be reliably measured or estimated, and where an entity opts to not carry at FVTPL).
• non-trading quoted debt investment securities (where an entity neither intends to hold to maturity nor seeks to carry at FVTPL).
• debt securities that an entity intends to hold to maturity, but for practical reasons it cannot, such as the case of a tainted portfolio which results in a time-out ban).

The lack of a reliable fair value measure commonly impacts an entity’s ability to classify assets as available for sale. For example, equity investments that do not have a quoted market price in an active market, in which case they will be measured at cost (less impairment loss, if any) as long as a reliable fair value is not available. Likewise, derivative instruments whose underlying is unquoted equity investments are also carried at cost until a reliable fair value estimate becomes available.