Paragraph B5.4.5 of IFRS 9 effectively states that amortized cost of a floating rate financial instrument, issued or purchased at par, equals to the principal amount of that financial instrument adjusted for accrued but unpaid interest. So, the calculation of the amortized cost for such an instrument becomes very simple since a change in the floating rate has no impact on the amortized cost, apart from the fact that accrued but unpaid interest would be calculated based on a new floating rate.
For financial instruments other than floating rate financial instruments, the terms of the original loan agreement might provide for a change in the interest rate upon occurrence (or non-occurrence) of some uncertain future event e.g. reduction of the interest rate if the entity completes Initial Public Offering (IPO) of new shares. Such instruments might be in scope of the paragraph B5.4.6 of the IFRS 9. Under this paragraph, when there is a change in the interest rate, the amortized cost of the financial instrument should be recalculated as a present value of the revised cash flows discounted using original effective interest rate. The difference between old carrying amount and the new carrying amount of the financial instrument should be recognized in the income statement.
How do you tell whether a financial instrument is a floating rate financial instrument or not?