Embedded derivatives with financial asset host

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The embedded derivative is not separated from the host contract. Instead the whole contrast in its entirety is accounted for as a single instrument in line with IFRS 9.

Embedded derivatives are components of a hybrid contract (i.e. a contract that also includes a non- derivative host), that causes some (or all) of the contractual cash flows to be modified according to a specified variable (e.g. interest rate, commodity price, foreign exchange rate, index, etc.)

IFRS Synonyms:
Embedded derivative within a financial host asset host contract, Embedded derivatives within a financial host asset host contract