EFRAG final comment letter on the request for information on the post-implementation review of IFRS 9

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

31 Jan, 2022

​​The European Financial Reporting Advisory Group (EFRAG) has published its Final Comment Letter in response to the International Accounting Standard Board’s (IASB's) request for information as a part of the Post-implementation Review ('PIR') of the classification and measurement requirements of IFRS 9 'Financial Instruments'.

EFRAG considers that the combination of the cash flow characteristics of the assets together with the assessment of the entity's business model has proved to generally provide an appropriate basis to align the measurement of financial instruments with how they are managed by the entity.  

However in its final comment letter, EFRAG notes a number of issues that are considered to be prevalent in Europe and might deserve standard-setting activities. EFRAG believes the following issues should be of highest priority:

  • Application of the SPPI test to sustainable finance products which EFRAG believes should be addressed urgently as a separate issue due to its expected pervasive effect in Europe.
  • The absence of recycling for FVOCI equity instruments.
  • The treatment of equity-type instruments, for example mutual funds and puttable instruments.

The press release and the final comment letter are available on the EFRAG website.

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