This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice ( for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

Prepayment Features with Negative Compensation - IASB

Date recorded:

At its meeting on January 18, 2017, the IASB met to discuss the classification of financial assets with symmetric prepayment options when applying IFRS 9 Financial Instruments. At this meeting, the Board tentatively decided:

  1. to propose a narrow-scope amendment to IFRS 9 so that a financial asset with a symmetric prepayment option would be eligible to be measured at amortized cost, or at fair value through other comprehensive income (subject to the financial asset meeting the business model condition) if: (a) the financial asset would otherwise meet the requirements in paragraph B4.1.11(b) of IFRS 9 (pre-payable financial assets whose contractual cash flows are solely payments of principal and interest) but does not do so only as a result of the symmetric nature of the prepayment feature; and (b) when the entity initially recognizes the financial asset, the fair value of the symmetric prepayment feature is insignificant;
  2. to propose the effective date for the narrow-scope amendment for annual periods beginning on or after January 1, 2018 (the same as that of IFRS 9) and also to include a question in the Exposure Draft about whether a later effective date, with early application permitted, would be more appropriate; and
  3. to require retrospective application of the proposed amendment. The Board will consider the comment period and due process steps taken on the proposed narrow-scope amendment to IFRS 9 at its February 2017 meeting.

Review the IASB Update on the IASB's Web site.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.