Cover note (Agenda Paper 27)

In this meeting, the IASB deliberated the feedback received in response to its request for information (RFI) Post-implementation Review—IFRS 9 Financial Instruments—Impairment. The deliberation was focused on three topics: loan commitments and financial guarantee contracts (FGCs), purchased or originated credit-impaired (POCI) financial assets, and interaction of impairment requirements in IFRS 9 with other requirements.

This paper was not discussed as it was an overview paper.

Loan commitments and financial guarantee contracts (Agenda Paper 27A)

This paper summarised the staff analysis on the feedback received in response to the RFI on application questions about loan commitments and FGCs.

Staff recommendation

The staff recommended that the IASB does not take any action on the matters raised by respondents about loan commitments whereas classify as low priority the matters raised by respondents about FGCs and consider these matters in next agenda consultation.

IASB discussion

Overall, IASB members were supportive of the staff’s analysis and recommendation. IASB members acknowledged that there is diversity in practice around application of the requirements for loan commitments in IFRS 9. They agreed with the staff analysis that the diversity and application challenges noted are not necessarily due to the lack of application guidance or the requirements in IFRS 9 being unclear. Instead, they are due to judgement involved when applying the requirements with careful consideration of facts and circumstances applicable to the loan commitments in question. For matters raised by respondents about FGCs, IASB members were supportive of the staff’s analysis and recommendation that it should be classified as low priority and considered in next agenda consultation.

IASB decisions

All IASB members voted in favour of the staff recommendation.

Purchased or originated credit-impairment financial assets (Agenda Paper 27B)

This paper summarised the staff analysis on the feedback received in response to the RFI on the application of the impairment requirements in IFRS 9 to POCI financial assets.

Staff recommendation

The staff recommended that the IASB does not take any further action on the matters raised by respondents.

IASB discussion

IASB members highlighted that the requirements under IFRS 9 for POCI financial assets were substantially carried forward from IAS 39 and the staff analysis shows that there is already an established practice. Overall, IASB members agreed with the staff analysis that the matters identified indicated that the POCI requirements are working as intended and that there are no fundamental questions. Therefore, the IASB should not take any further action on the matters identified.

IASB decisions

All IASB members voted in favour of the staff recommendation.

Interaction of impairment requirements with other requirements (Agenda Paper 27C)

This paper summarised the staff analysis on the feedback received in response to the RFI on the interaction between the impairment requirements in IFRS 9 and the other requirements, specifically, relating to modifications, derecognition (including forgiveness), and write-off of financial assets under IFRS 9 and the requirements in other IFRS standards.

Staff recommendation

The staff recommended that the IASB does not take any further action on the matters identified regarding the interaction between the impairment requirements and the other requirements in IFRS 9 or the requirements in other IFRS standards.

IASB discussion

IASB members were supportive of the staff analysis and recommendation that the IASB should take no further action on matters identified. They agreed that introducing additional guidance would not eliminate the diversity observed in practice. Further, IASB members agreed with the staff recommendation that the IASB should holistically consider as part of the forthcoming amortised cost measurement project the specific application questions arising from applying impairment requirements alongside other requirements of IFRS 9. One of the IASB members highlighted that it is important that the IASB is managing stakeholder expectations appropriately where it makes reference to a future project on amortised cost.

IASB decisions

All IASB members voted in favour of the staff recommendation.