to the recognition and derecognition of financial assets and
liabilities.
IAS 39 and FRS 26 specify the criteria for the classification of
financial assets and financial liabilities into the various categories
and the basis of accounting under those categories. Generally
financial instruments are recognised initially at fair value, plus
transactions costs (if the financial instrument is not carried at
fair value through profit or loss) and are subsequently measured
either at fair value or at amortised cost using the effective
interest rate method.