35EA financial asset is eligible for designation for the overlay approach if, and only if, the following criteria are met:

35E A financial asset is eligible for designation for the overlay approach if, and only if, the following criteria are met:
(a) it is measured at fair value through profit or loss applying AASB 9 but would not have been measured at fair value through profit or loss in its entirety applying AASB 139; and
(b) it is not held in respect of an activity that is unconnected with contracts within the scope of this Standard, AASB 1023 or AASB 1038\. Examples of financial assets that would not be eligible for the overlay approach are those assets held in respect of banking activities or financial assets held in funds relating to investment contracts that are outside the scope of this Standard, AASB 1023 or AASB 1038.
35F An insurer may designate an eligible financial asset for the overlay approach when it elects to apply the overlay approach (see paragraph 35C). Subsequently, it may designate an eligible financial asset for the overlay approach when, and only when:
(a) that asset is initially recognised; or
(b) that asset newly meets the criterion in paragraph 35E(b) having previously not met that criterion.
35G An insurer is permitted to designate eligible financial assets for the overlay approach applying paragraph 35F on an instrument-by-instrument basis.
35H When relevant, for the purposes of applying the overlay approach to a newly designated financial asset applying paragraph 35F(b):
(a) its fair value at the date of designation shall be its new amortised cost carrying amount; and
(b) the effective interest rate shall be determined based on its fair value at the date of designation.
35I An entity shall continue to apply the overlay approach to a designated financial asset until that financial asset is derecognised. However, an entity:
(a) shall de-designate a financial asset when the financial asset no longer meets the criterion in paragraph 35E(b). For example, a financial asset will no longer meet that criterion when an entity transfers that asset so that it is held in respect of its banking activities or when an entity ceases to be an insurer.
(b) may, at the beginning of any annual period, stop applying the overlay approach to all designated financial assets. An entity that elects to stop applying the overlay approach shall apply AASB 108 to account for the change in accounting policy.
35J When an entity de-designates a financial asset applying paragraph 35I(a), it shall reclassify from accumulated other comprehensive income to profit or loss as a reclassification adjustment (see AASB 101) any balance relating to that financial asset.
35K If an entity stops using the overlay approach applying the election in paragraph 35I(b) or because it is no longer an insurer, it shall not subsequently apply the overlay approach. An insurer that has elected to apply the overlay approach (see paragraph 35C) but has no eligible financial assets (see paragraph 35E) may subsequently apply the overlay approach when it has eligible financial assets.