Changes (increments) in values of assets and liabilities that are driven by changes in fundamental economic factors (such as price and interest rate changes, change in risk factors like credit risk, etc.) For example, assets like marketable securities, investments, and available for sale items (AFS) may experience increases in value (fair value) over time, and reflection of such changes in the financial statements of an entity’ differs from case to case.

For a financial liability designated at fair value through profit and loss (FVTPL), incremental changes in fair value attributable to changes in the credit risk of that liability are recognized in other comprehensive income (OCI) and are not subsequently transferred to P/L. Likewise, specific items like equity investments which are denominated in a foreign currency or a basket of currencies, fair value gains/ losses would also include foreign exchange impacts and have to be recognized in other comprehensive income.