IFRS 9/ IAS 39 — Derecognition of modified financial assets

Date recorded:

IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement — Derecognition of modified financial assets - Comment Letter Analysis and Finalisation of Agenda Decision – Agenda paper 9


In November 2015, the IFRS Interpretations discussed whether it should progress it’s consideration of a potential project to clarify the requirements in IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement regarding when a modification or exchange of a financial asset results in the original asset being derecognised. The Interpretations Committee tentatively decided not to take the issue into its agenda given the broad nature of the issue.

The purpose of this session was to provide an analysis of the comment letters received and discuss the staff recommendation.

Comment letters analysis

The staff indicated that most respondents agreed that the issue was too broad to be resolved through an Interpretation; however, the majority of respondents indicated that the Board should address this issue. The reasons provided were that (i) neither IAS 39 nor IFRS 9 included requirements that were sufficient regarding the modification of financial assets, which lead to a risk of divergence in accounting practice (ii) the modification of financial assets was already an issue that arises in practice; (iii) such transactions were likely to increase given the current economic environment; and (iv) potential issues that could arise under IFRS 9.

Staff recommendation

The staff recommended that the Interpretation Committee finalise the agenda decision because the staff considered that (i) the comment letter did not provide additional information and (ii) the Board members consulted in November 2015 did not express interest in considering a project on this issue.


This issue was not discussed during this meeting due to a lack of time. It will be discussed at the next meeting of the IFRS Interpretations Committee in May 2016.

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