IFRS 9 and IAS 39 — Derecognition of modified financial assets

Date recorded:


In November 2015, the staff asked the IFRS Interpretations Committee whether they would like to progress with a potential project to clarify IFRS 9 and IAS 39 in relation to the derecognition requirements on modifications or exchanges of financial assets.

The staff concluded that it would be difficult to develop a narrow-scope project, as there are potential implications for the derecognition of transferred financial assets, linkage of transactions and the derecognition of modified financial liabilities. Moreover, such a project would require a significant amount of time and resources. The staff also noted that there was limited evidence of a pressing need for new guidance.

Hence, the staff recommended not to pursue the issue at this time. Individual members of the IASB supported this recommendation in an informal sounding.

Respondents to the tentative agenda decision agreed that the issue was too broad to be resolved through an Interpretation, however five of the six respondents requested that the matter should be addressed by the Board.

The staff do not think that the comment letters provide any new information that would be directly relevant to the Board’s consideration of whether to undertake a project about the derecognition of modified financial assets. Consequently, the staff recommend that the tentative agenda decision should be finalised with only a few suggested editorial changes.

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