For a bank reporting under IFRS, you may see it classify some of its financial assets under the fair value through the OCI category. Firstly, IFRS requires that a bank look at what is referred to as the business model. That is the way in which the financial asset is managed, i.e., are we gonna trade the asset, or are we gonna hang onto it with a view to collecting interest payments and ultimately the principal once it reaches maturity? Well, let's be clear here. We're talking about financial assets where the asset is managed on a hold to collect and sell basis. That sounds like IFRS jargon, so what does that actually mean? Well, it needs to be the case that the bank intends to hold the financial asset with a view to collecting interest and principal repayment. However, the bank is also fully prepared to sell the financial asset if necessary, for example, to maintain a particular interest yield. Okay, so we've answered the first question. Let's move on to the cash flow characteristics. Here, we need to look at the contractual cash flows associated with the financial asset. Are these cash flows solely made up of interest and principal repayment? What we are, of course, talking about is a debt instrument, not equity. So if we have an instrument, say a bond, with a stated maturity date where the cash flows are entirely principal and interest, then it meets this test. Clearly, the intention here is to capture financial instruments that are effectively just basic lending arrangements. If the financial assets meet both, and I'm stressing both tests, i.e., it's managed on a hold to collect and sell basis and the cash flows are solely made up of interest in principal repayment, then it will fall within the fair value through the OCI category of financial assets. Some examples include investment in government and corporate bonds where the investment period is likely to be shorter than the maturity. So for example, a 30-year bond where the intended investment is likely, and I'm stressing likely, because this is all about expectation, to be less than 30 years. So let's think about it. I have an entity that has sold some assets. Let's say it's sold some property, plant, and equipment and has some surplus cash, but it's not yet ready to purchase new property, plant, and equipment. It decides to make a six-month investment in government bonds. These bonds have a two-year maturity, and in the interim, in order to generate some interest income, it decides to make this investment. It's unlikely in this case that the bonds will be held to maturity. Therefore, this financial asset would be categorized as fair value through the OCI. So the next question is, what does this actually mean? When we talk about fair value through the OCI, what are the mechanics? Well, because the financial asset is potentially going to be sold before maturity, it seems right that we should make incremental fair value adjustments to its carrying amount in the balance sheet. The intention here is that when we do sell, the carrying amount is near to the price we'll sell at. Hopefully this all sounds sensible. But we don't want these carrying amount adjustments to hit our profit and loss account because we're not actually trading the asset. Hopefully you can see that that volatility wouldn't be helpful. In fact, we only want to recognize these value changes in our profit when we realize the gain or the loss, i.e., when we actually sell the asset. So that's what we do. Refer to this as recycling the cumulative value in the OCI. In a way, you could think of the OCI as a holding account, a store of profit or loss waiting to be released on the sale of the financial asset. In the numbers of the screen, you can see that we bought the financial asset for 100. Then we fair valued it down to 80, storing that loss in the OCI and therefore sidestepping the P&L. Finally, we sold the financial asset for 81, which is slightly above its carrying amount but 19 below what we originally bought it for, 100 less 81 being 19. You'll notice that we wipe out the 20 sitting in the OCI, and retained earnings is hit with the 19 loss. In this sense, we've recycled the 20 sitting in the OCI to the retained earnings.