Which one of the following is accurate concerning the order in which derecognition principles surrounding financial assets in IFRS 9 is applied?
A. Derecognition principles may be applied in any order it will always result in the same conclusion when principles are applied correctly
B. Derecognition principles must be applied in the proper order dictated by IFRS 9
C. Derecognition principles are more general in nature and therefore ordering is not a particular issue or concern under IFRS 9
D. Derecognition principles are applied in a different order depending on the type of financial asset and transaction being evaluated
B. Derecognition principles must be applied in the proper order dictated by IFRS 9.
Under IFRS 9, Financial Instruments: Recognition and Measurement, derecognition of a financial asset is a multi-step process, and the order of these steps is critical to ensure correct accounting treatment. The standard specifies the sequence in which to assess whether an entity has transferred a financial asset in such a way that derecognition is appropriate. Therefore, it's crucial to follow the proper order of the derecognition principles as outlined in the standard to determine the appropriate accounting treatment.
