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IASB publishes request for information on the post-implementation review of IFRS 9

  • IASB document (blue) Image

30 Sep 2021

The International Accounting Standards Board (IASB) has issued a request for information (RFI) seeking comments from stakeholders to identify whether the classification and measurement requirements in IFRS 9 'Financial Instruments' provide information that is useful to users of financial statements; whether there are requirements that are difficult to implement and may prevent the consistent implementation of the standard; and whether unexpected costs have arisen in connection with applying or enforcing the standard.

The post-implementation review process for IFRS 9 was officially taken up in October 2020. While the IASB intends to conduct a post-implemtation review (PIR) of all parts of IFRS 9, the IASB decided to separate the PIR of the IFRS 9 classification and measurement requirements (including FVOCI equity instruments) from the PIR of the rest of IFRS 9 in order to start the PIR on classification and measurement as soon as possible. The Board intends to take up the PIR of the other sections (impairment and hedge accounting requirements) when more information is available about how the requirements in those sections work in practice.

After discussing feedback from outreach, the Board decided in July 2021 to examine further certain aspects of the following matters:

  • Business model assessment for financial assets
  • Contractual cash flow characteristics assessment for financial assets
  • Option for equity instruments to present fair value changes in other comprehensive income
  • Financial liabilities designated as fair value through profit or loss
  • Modifications to contractual cash flows
  • Transition to IFRS 9

In addition, the IFRS Interpretations Committee received a question on amortised cost and the effective interest method that the Committee suggested to include in the PIR as the question is relevant in a wider context.

Accordingly, the RFI is structured into nine sections:

Classification and measurement — general Asks for a general assessment of whether the classification and measurement requirements in IFRS 9 are working as the Board intended and whether they lead to useful information to users in order to understand. Special focus of this section are the effects of the classification and measurement changes introduced by IFRS 9, including the ongoing costs and benefits in preparing, auditing, enforcing or using information about financial instruments.
Business model for managing financial assets Asks whether the business model assessment is working as the Board intended, whether it can be applied consistently, and whether any unexpected effects have arisen. Special focus of this section is the reclassification of financial assets.
Contractual cash flow characteristics Asks whether the cash flow characteristic assessment is working as the Board intended, whether it can be applied consistently, and whether any unexpected effects have arisen. Special focus of this section are financial assets with sustainability-linked features and contractually linked instruments.
Equity instruments and other comprehensive income Asks whether the option to present fair value changes on investments in equity instruments in other comprehensive income is working as the Board intended, for what equity instruments entities elect to use the option, and whether any unexpected effects have arisen. Special focus of this section is the recycling of gains and losses.
Financial liabilities and own credit Asks whether the requirements in IFRS 9 for presenting the effects of own credit in other comprehensive income is working as the Board intended and whether there are any other matters relating to financial liabilities that the Board should consider.
Modification to contractual cash flows Asks whether the requirements for modifications to contractual cash flows is working as the Board intended and whether they can be applied consistently.
Amortised cost and effective interest method Asks whether the effective interest method is working as the Board intended and whether it can be applied consistently. Special focus of this section are interest rates subject to conditions and estimating future cash flows.
Transition Asks whether the transition requirements worked as the Board intended, whether there were any unexpected effects or challenges resulting from applying the transition requirements, and how those were overcome.
Other matters Asks whether there any other matters that the Board should examine as part of the PIR of the classification and measurement requirements of IFRS 9 and whether there are lessons to be learned from the Board’s approach to developing IFRS 9.

    Comments on the RFI are requested by 28 January 2022. The request for information and a corresponding press release are available on the IASB website. Deloitte has published a Need to know newsletter explaining the RFI in more detail.

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