CCP in trouble? Cap raise after directors dumped on market. Red flag, page-24

I like a lot of your posts Pioupiou, they are very knowledgeable and valuable. I politely highlight a couple of items.

Prudence no longer exists as a tenet in the IFRS conceptual framework (and hasn't for many years).

An amortised cost model as applied to debts acquired at deep-discount will/should lead to upward revaluations at all balance sheet dates where there are underlying improvements in future cash collection profile (and vice versa). This aspect hasn't changed under the new standard. For example by converting a non-paying debtor into a paying one, if accounted for at that unit of account, will lead to an immediate value increase (reflecting the change in future cash flow expectations). There is actually no difference between FV and Amortised Cost there (there is in a couple of other areas, principally the discount rate applied). There may be in the application by those applying AC but that doesn't mean it's correct, nor the likely application of prudence (even if inherently sensible - robbing Peter to pay Paul always end up badly, eventually....of course unless you sold stock in the meantime at inflated values).

AASB doesn't allow a company to elect to apply amortised cost. It must apply fair value, unless certain defined characteristics apply. Incidentally in the basis of conclusions for IFRS9 back in 2009 originally forcibly suggested/required debts acquired at deep discount to be measured at fair value on the basis that they essentially weren't basic lending arrangements to collect simple principle and interest. That subsequently got removed on industry feedback, nonetheless the main value derived from a PDL is the conversion of a customers payment profile often involving early payment discount inducement to settle. As such I have a predisposition to many of the arguments original ally envisaged by the standard setter that the basic lending criteria and business model characteristics are too far removed from the requirements to allow amortised cost. Regardless as pointed out above it doesn't really matter too much as both it is principally the discount rate (EIR vs Mkt) that differs and as (most likely only around the edges) lead to small value shifts (either positive or negative - there is no one way bias as some might suggest). Ultimately amortised cost is essentially only a not so distant relative of FV (especially for these types of asset).

All that aside I have favoured CCPs metrics over the years but presently can't pass comment without further analysis. My most recent foray was on the back of the poorly conceived short attack where I made a fast buck but should have held longer...

DYOR