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Interest Rate Benchmark Reform – Phase II – International Accounting Standards Board

Date recorded:

At its meeting on October 23, 2019, the IASB met and discussed potential accounting issues related to the classification and measurement of financial instruments that could arise as a result of interest rate benchmark reform (IBOR reform). Specifically, the Board discussed:

  1. the assessment of whether a change in the contractual cash flows or terms of a financial instrument is a substantial modification, and the accounting requirements for modifications that are not substantial (that is, modifications that do not result in the derecognition of a financial instrument when IFRS 9 Financial Instruments is applied); and
  2. modifications that result in the derecognition of existing financial instruments and the accounting implications of recognizing modified financial instruments as ‘new’ financial instruments.

The Board made a number of tentative decisions with respect to both (1) and (2) at its meeting. The Board will continue its discussions of this project at future meetings.

Review the IASB Update and podcast on the Board's Web site.

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