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IFRS 9 — Financial Instruments

Effective date:

First effective as Canadian GAAP under Part I for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011, except for subsequent amendments.  Earlier application of Part I was permitted.

Published by the IASB:

The final version of IFRS 9 was published in July 2014

Included in Part I of CPA Canada Handbook:

February 2015

Reach out to our IFRS 9 Specialist

Kerry Danyluk

 

Overview

The final version of IFRS 9 Financial Instruments issued in July 2014 is the IASB's replacement of IAS 39, Financial Instruments: Recognition and Measurement.  The Standard includes requirements for recognition and measurement, impairment, derecognition and general hedge accounting.

Of note, per its Advisory dated March 20, 2017, OSFI expects Canadian federally regulated life insurers to defer the application of IFRS 9 until January 1, 2021, the expected effective date of IFRS 17, the IASB’s new Insurance Contracts standard. While OSFI supports the improved standard, IFRS 9, over the existing IAS 39, Financial Instruments, OSFI also finds that a deferral of IFRS 9 for life insurers is needed given the 2018 introduction of OSFI’s new Life Insurance Capital Adequacy Test. OSFI will only provide an exception to this Advisory where a federally regulated life insurer itself or its federally regulated parent does not meet the predominance test as described in the IASB’s September 2016 amendment to IFRS 4, Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts. For example, an exception to this Advisory will be applied if the federally regulated life insurer is a subsidiary of a federally regulated deposit taking institution such as a bank who would not meet the predominance test.

History of IFRS 9

The following table shows the history of this standard subsequent to the adoption of IFRS in Canada.

Date1

Development

Comments

Included in Part I of CPA Canada Handbook2

November 12, 2009

Original version of IFRS 9, Financial Instruments issued, covering classification and measurement of financial assets

This new standard replaces the requirements in IAS 39, Financial Instruments: Recognition and Measurement for classification and measurement of financial assets.

The new standard was effective for fiscal years beginning on or after January 1, 2013 with earlier application permitted.

April 2010

October 28, 2010

IFRS 9, Financial Instruments reissued, incorporating new requirements on accounting for financial liabilities and carrying over from IAS 39 the requirements for derecognition of financial assets and financial liabilities.

This standard was amended to provide guidance on the classification and reclassification of financial liabilities, their measurement and the presentation of gains and losses on financial liabilities designated at fair value through profit and.

These amendments were effective for annual periods beginning on or after January 1, 2013 with earlier application permitted. On adoption, the classification of a financial liability may be changed.

March 2011

December 16, 2011

Mandatory Effective Date and Transition Disclosures (Amendments to IFRS 9 and IFRS 7) published

 

Amended the effective date of IFRS 9 to annual periods beginning on or after January 1, 2015 (removed in 2013), and modified the relief from restating comparative periods and the associated disclosures in IFRS 7.

May 2012

November 19, 2013

IASB issues IFRS 9, Financial Instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39) amending IFRS 9 to:

  1. include the new general hedge accounting model;
  2. allow early adoption of the requirement to present fair value changes due to own credit on liabilities designated as at fair value through profit or loss to be presented in other comprehensive income; and
  3. remove the January 1, 2015 effective date

This version of IFRS 9, as amended, supersedes IFRS 9 as issued by the IASB in October 2010 and IFRS 9 as issued by the IASB in November 2009. However, an entity may elect to apply either of those earlier versions.

This version of IFRS 9, as amended, was available for current application. Application is permitted if all of the requirements in the standard, as well as related amendments to other IFRSs, are applied at the same time, with limited exceptions.

February 2014

July 24, 2014

IASB issues final version of IFRS 9, Financial Instruments

The final version of this new standard, issued by the IASB in July 2014, replaces IAS 39, Financial Instruments: Recognition and Measurement and IFRIC 9, Reassessment of Embedded Derivatives. This standard largely retains the classification and measurement requirements and new hedge accounting model included in earlier versions, while introducing a single forward-looking expected credit loss impairment model.

The final version of this new standard supersedes the requirements of earlier versions of IFRS 9. However, for annual periods beginning before January 1, 2018, an entity may elect to apply those earlier versions instead of applying the final version of this new standard if, and only if, its initial application date is before February 1, 2015.

The final version of this new standard is effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted.

February 2015

October 12, 2017

IASB is­sues "Prepayment Features with Negative Compensation (Amendments to IFRS 9)" to address the concerns about how IFRS 9 classifies particular prepayable financial assets. In addition, the amendments clarify an aspect of the accounting for financial liabilities following a modification.

The amendments are to be applied retrospectively for fiscal years beginning on or after January 1, 2019, i. e. one year after the first application of IFRS 9 in its current version. Early application is permitted so entities can apply the amendments together with IFRS 9, if they wish so. Additional transitional requirements and corresponding disclosure requirements must be observed when applying the amendments for the first time.

 November 2017

November, 2017

N/A

CPA Canada added to Part I of the CPA Handbook the Basis for Conclusions issued by the IASB in July 2014 that accompanies, but is not part of, IFRS 9. The Basis for Conclusions includes amendments made subsequently in October 2017 by the IASB for Prepayment Features with Negative Compensation.

November 2017

Notes

  1. For further details of relevant developments prior to this, please refer to our Deloitte Global section.
  2. Newly issued, amended or revised IFRSs are part of Canadian GAAP only after they are approved by the Accounting Standards Board in accordance with its due process.

The above summary does not include details of consequential amendments made as the result of other projects.

Related Interpretations

  • None

Related IFRIC Agenda Rejection Notices

The rejection notices are available in our Deloitte Global section.

  • IAS 32 — Accounting for a financial instrument that is mandatorily convertible into a variable number of shares subject to a cap and a floor (May 2014)

AcSB’s IFRS Discussion Group meetings

  • June 21, 2018 - IFRS 9: Modifications or Exchanges of Fixed-rate and Floating-rate Financial Instruments and Lifetime Expected Credit Losses for Trade Receivables
  • January 10, 2018 - IFRS 9: Cryptocurrencies, Scope Interactions and Modifications or Exchanges of Financial Liabilities that do not Result in Derecognition
  • October 5, 2017 - IFRS 9: Own Use Contracts and Classification of Financial Assets and Modifications or Exchanges of Financial Liabilities that do not Result in Derecognition
  • October 5, 2017 - IFRS 9, IFRS 15 and IAS 34: Disclosing the Effects of Adopting New Standards
  • May 30, 2017 - IFRS 9, IFRS 15 and IAS 16: Seller’s Right to Variable Consideration in an Asset Sale and IFRS 9: Matters for Non-Financial Entities, Modifications or Exchanges of Financial Liabilities that do not Result in Derecognition and Implementation Matters
  • November 29, 2016 - IFRS 9: Non-viability Contingent Conversion Feature, IFRS 5 and IFRS 9: Application of IFRS 9 to Transactions of a Subsidiary when the Subsidiary is Held for Sale and Settlement of a Shareholder Loan and Update on Implementation Support
  • September 13, 2016 - IFRS 9 and IAS 28: Measurement of Long-term Interests
  • May 31, 2016 - IFRS 9 and IAS 28: Measurement of Long-term Interests
  • December 3, 2015 - IFRS 9: Impaired Assets on Transition
  • September 10, 2015 - IFRS 9: Effective Interest Rate
  • May 14, 2015 - IFRS 9: Transition and IFRS 9: Hedge Accounting
  • September 11, 2014 - IFRS 9 and IAS 39: Flow-through Shares with Attached Share Purchase Warrants and IFRS 9: Financial Instruments

Amendments under consideration

 

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