Final answer:
The IFRS approach to derecognizing a receivable requires an analysis of whether substantially all risks and rewards of ownership have been transferred, not derecognizing the asset if substantial risks and rewards are retained.
Step-by-step explanation:
The IFRS approach to derecognizing a receivable focuses on whether the entity has transferred substantially all the risks and rewards of ownership of the financial asset. If the entity has retained substantially all the risks and rewards, then the receivable is not derecognized. The assessment of risks and rewards includes examining various factors such as the likelihood of collecting the receivable, whether the selling entity is obligated to make payments even if they do not collect from the debtor, and any recourse provisions. The entity also considers whether it has transferred control of the asset, which involves the ability or inability to sell or pledge the asset. The IFRS criteria ensure that derecognition reflects the true economic reality of the transfer of financial assets.