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Financial instruments — Comprehensive project

Background

The objective of this project is to completely replace the requirements of IAS 39 Financial Instruments: Recognition and Measurement with a new standard that represents a comprehensive reconsideration of the requirements of accounting for financial instruments. The project aims to substantially reduce the complexity and difficulties currently experienced with existing requirements.

Current status of the project

The project has been split into a number of components:

ComponentStatus
Classification and measurement Assets - IFRS 9 issued 12 November 2009
Liabilities - IFRS 9 reissued 28 October 2010
Impairment Exposure Draft ED/2013/3 Financial Instruments: Expected Credit Losses published on 7 March 2013
General hedge accounting IFRS 9 reissued 19 November 2013
Macro hedge accounting* Discussion Paper expected first or second quarter of 2014
Asset and liability offsetting Amendments to IFRS 7 and IAS 32 issued on 16 December 2011
Derecognition Existing requirements in IAS 39 incorporated into IFRS 9 on 28 October 2010
Deferral of effective date of IFRS 9 Amendments to IFRS 9 and IFRS 7 issued on 16 December 2011
Limited reconsideration of IFRS 9 Exposure Draft ED/2012/4 Classification and Measurement: Limited Amendments to IFRS 9 published in November 2012

* In November 2013, the IASB issued IFRS 9 Financial Instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39), which included a new general hedge accounting model, and removed the 1 January 2015 effective date of IFRS 9 Financial Instruments pending finalisation of the comprehensive project on financial instruments. The macro hedge accounting project is subsequently being separately considered by the IASB, accordingly, the determination of an effective date of IFRS 9 is not dependent upon finalisation of this project. At its November 2013 meeting, the IASB tentatively decided that the mandatory effective date of IFRS 9 would be no earlier than annual periods beginning on or after 1 January 2017. The IASB then tentatively decided at its February 2014 meeting to set 1 January 2018 as the effective date for the mandatory application of IFRS 9.

Project milestones

DateDevelopmentComments
September 2004 Financial Instruments Working Group appointed
6 March 2006 Staff Questionnaire on users' views on fair value disclosures Response deadline 14 April 2006
20 March 2008 Discussion Paper Reducing Complexity in Reporting Financial Instruments published Comment deadline 19 September 2008
June 2009 Project divided into three components:
  • Classification and measurement
  • Impairment
  • Hedge accounting
12 November 2009 IFRS 9 Financial Instruments issued, covering classification and measurement of financial assets Effective for annual periods beginning 1 July 2013 (later deferred)
June 2010 New component on offsetting of assets and liabilities added
28 October 2010 IFRS 9 Financial Instruments reissued, incorporating accounting for financial liabilities, and derecognition Effective for annual periods beginning 1 July 2013 (later deferred)
July 2011 New component on the effective date of IFRS 9 added To consider deferral of mandatory date to 1 January 2015
November 2011 New component on limited reconsideration of IFRS 9 added Expected to possibly consider interaction with the insurance project, and convergence with FASB
16 December 2011 Mandatory Effective Date and Transition Disclosures (Amendments to IFRS 9 and IFRS 7) Amends the effective date of IFRS 9 to annual periods beginning on or after 1 January 2015, and modifies the relief from restating comparative periods and the associated disclosures in IFRS 7
16 December 2011 Disclosures — Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7) issued The amendments to IFRS 7 apply to annual periods beginning on or after 1 January 2013 and interim periods within those periods
16 December 2011 Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32) issued The amendments to the application guidance in IAS 32 are applicable to annual periods beginning on or after 1 January 2014
7 September 2012 'Review draft' of the general hedge accounting section of IFRS 9 published At that time, finalised requirements were expected in the fourth quarter of 2012
19 November 2013 IFRS 9 Financial Instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39) issued The amendment removed the mandatory effective date for IFRS 9 which will be set once the standard is complete with a new impairment model and finalisation of any limited amendments to classification and measurement

For more information, including details of exposure drafts and other due process documents for each phase, refer to the individual project pages for the various project components.

Deloitte IFRS podcasts on financial instruments

Andrew Spooner, lead IFRS financial instruments partner, and Bob Uhl, head of the US Accounting Standards group and IFRS Centre, debate the IASB and FASB's proposals for financial instruments. The discussions are chaired by Robert Bruce. The podcasts are part of a series we make available on IAS Plus:

  • Part 1: Classification and measurement of financial instruments. The podcast is available for download here (19:30 mins, 23mb) or via iTunes.
  • Part 2: Impairment of financial instruments. The podcast is available for download here (28:19 mins, 33mb) or via iTunes.
  • Part 3: Hedge accounting of financial instruments. The podcast is available for download here (18:28 mins, 22mb) or via iTunes.

Andrew Spooner, Lead IFRS financial instruments partner, and Kush Patel, senior manager and recent IASB Practice Fellow, discuss the IASB’s exposure draft on hedge accounting. They discuss the key changes that are proposed and provide an insight into the likely effect they will have in practice. The discussion is chaired by Robert Bruce.

  • Part 4: Hedge accounting Exposure Draft. The podcast is available for download here (35:18 mins 33 mb) or via iTunes.

Andrew Spooner, Lead IFRS Partner on Financial Instruments, discusses the new IASB standard on Fair Value Measurement with Robert Bruce.

  • Part 5: IFRS 13 Fair Value Measurement. The podcast is available for download here (18 mins, 13 mb) or via iTunes.

Related Discussions

  • IASB activities update

  • Feb 24, 2014

  • IASB Chairman Hans Hoogervorst and others from the IASB provided an update on recent IASB activities.

  • IASB Chairman’s report

  • Jan 27, 2014

  • Mr Hoogervorst provided an update, noting his remarks would concentrate on three areas: financial instruments, leases and insurance.

  • Impairment (IASB and FASB)

  • Jul 23, 2013

  • The Board discussed feedback from outreach activities, field work, and comment letters on the proposals in Exposure Draft 'Financial Instruments: Expected Credit Losses' as well as constituents’ feedback on the FASB impairment proposals.

  • Classification and measurement (IASB and FASB)

  • Jul 23, 2013

  • The Boards discussed the plans for the upcoming joint re-deliberations of their projects on classification and measurement of financial instruments. No questions were asked to the Boards at this meeting.

  • Financial instruments — Impairment (IASB only)

  • Dec 14, 2012

  • The Board continued discussion of its proposed ‘three-bucket’ impairment model in discussing the following topics: 1) Transitional requirements; 2) Due process considerations; and 3) Re-exposure, comment period and permission to draft.

  • Offsetting Update (IASB only)

  • Nov 20, 2012

  • The staff updated the IASB on the amended scope to the related disclosure requirements the FASB has tentatively reached.

  • Financial Instruments

  • Aug 26, 2010

  • It was noted that EFRAG had responded positively to the IASB's request that IFRS constituents respond to the FASB's exposure draft on financial instruments.

  • Financial Instruments: Recognition and Measurement

  • Jun 01, 2009

  • The Board discussed (1) the principles based, two-step approach to classifying financial instruments, (2) implications of the business model, (3) implications for embedded derivatives and (4) the OCI method for equity instruments.

  • Financial Instruments

  • Apr 23, 2009

  • The Boards discussed responses to their request for views on FSP FAS 115-2 and FAS 124-2.