EFRAG draft comment letter on the IFRS Interpretations Committee's tentative rejection of an agenda item on the restructuring of Greek government bonds
Jun 11, 2012
The European Financial Reporting Advisory Group (EFRAG) has issued its draft comment letter on the recent decision made by the IFRS Interpretations Committee to not add to its agenda a project related to Greek Government Bonds (GGBs). The Committee had received a request for guidance related to the restructuring of GGBs and whether such restructuring should result in derecognition of the whole financial asset, or only part of the financial asset.
In its comment letter, EFRAG agrees with the IFRS Interpretations Committee's conclusion during its May 2012 meeting that restructuring of the GGBs would result in derecognition of the old GGBs, and EFRAG agrees with the tentative decision to not add a project to the Committee's agenda. However, EFRAG believes that guidance on debt restructurings should be explicitly stated in IFRSs. As such, it noted that the Committee should recommend to the IASB that accounting for debt restructurings and modifications should be part of the IASB's finalisation of IFRS 9 Financial Instruments.
Comments on the letter are invited by 12 July 2012. The draft comment letter can be downloaded via the press release on EFRAG's website.