Financial instruments — Limited consideration of IFRS 9 (classification and measurement) (IASB only)
The staff prepared two agenda papers prior to the meeting covering:
- An update on the IASB and FASB’s individual tentative decisions since the conclusion of the joint deliberations in July, highlighting potential differences between the Boards’ models.
- A sweep issue relating to regulated interest (in which pricing of a financial asset is extensively regulated by the government or central bank and interest rates set by the government or central bank represent the legal basis for pricing retail and commercial loans denominated in local currency for that jurisdiction) and the application of the contractual cash flows test.
Neither paper was discussed at the meeting. Instead, the IASB staff noted that it will continue with the drafting of the Exposure Draft, noting the sweep issue in the basis for conclusions. Any feedback received to the Exposure Draft will be considered as part of subsequent Board redeliberations.
One Board member highlighted the difference in the measurement of unlisted equity investments; the IASB model requires fair value measurement whereas under the FASB model, an entity can elect to measure non-marketable equity securities at cost adjusted for impairment and observable price changes. He requested clarification of the practical impact of such divergence. The IASB staff noted it would consider this topic off-line.
The Board was not asked to make any tentative decisions as a result of the prepared agenda papers.