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IFRS on embedded derivatives on reclassification

Mar 12, 2009

The IASB has amended IFRIC 9 and IAS 39 to clarify the accounting treatment of embedded derivatives for entities that make use of the Reclassification Amendment issued by the IASB in October 2008. The reclassification amendment allows entities to reclassify particular financial instruments out of the 'fair value through profit or loss' category in specific circumstances.

These amendments to IFRIC 9 and IAS 39 clarify that on reclassification of a financial asset out of the 'fair value through profit or loss' category, all embedded derivatives in the reclassified instrument have to be assessed and, if necessary, separately accounted for in financial statements.

The amendments apply retrospectively and are effective for annual periods ending on or after 30 June 2009. Click for the IASB Press Release (PDF 22k).