b) Basics Steps in the Application of Business Model Test in IFRS 9
The steps in the application of business model tests under IFRS 9 are as
follows:
i. Sub-dividing where necessary loans and receivables into different groups or portfolios based on the way they are managed;
ii. Objective identification of the entity, which is used in the course of its business to manage each group or portfolio;
iii. Classification for each group or portfolio of financial assets as being held to collect, and held to sell; and
iv. The appropriateness of the classification will be evaluated through back-testing of past activities, for the assets classified as held to collect.