The purpose of this Treasury Policy Paper is to provide guidance and outline NSW Treasury’s requirements for applying AASB 9 Financial Instruments and AASB 132 Financial Instruments: Presentation by agencies, including:

• general requirements for the classification, recognition and measurement of financial instruments in accordance with AASB 9 and AASB 132 (sections 2 to 6)

• restrictions on the use of the following categories of financial instruments:

  • fair value designation option (sections 3.4.3 and 4.1);

  • fair value through other comprehensive income of equity instruments designation option (section 3.3)

• guidance and requirements regarding accounting for:

  • impairment for expected losses (section 7)

  • hedge accounting (section 8).