Post-implementation review — IFRS 9 (Classification and measurement)

 

Background

The IASB carries out a post-implementation review of each new IFRS or major amendment. This is normally carried out two years after the new requirements have become mandatory and been implemented.

The objectives of a post-implementation review, according to the IASB's Due Process Handbook, are:

  • to review the important issues that had been identified as contentious during the development of the pronouncement
  • to consider any unexpected costs or implementation problems that have been encountered.

This page covers the first part of the IASB's post-implementation review of IFRS 9 Financial Instruments. In October 2020, the IASB decided to take up a post-implementation review (PIR) of IFRS 9 by separating the PIR of the IFRS 9 classification and measurement requirements (including FVOCI equity instruments) from the PIR of the rest of IFRS 9 and to start the PIR on classification and measurement as soon as possible.

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

  • Business model assessment for financial assets:
    • Application of judgement in applying the business model assessment
    • Reclassification of financial assets due to a change in business model
  • Contractual cash flow characteristics assessment for financial assets:
    • Applying the assessment in the light of market developments (including new product features)
    • Investments in contractually linked instruments (CLIs)
  • Option for equity instruments to present fair value changes in other comprehensive income (OCI):
    • Prevalence of the use of the presentation option and types of instruments it is used for
    • Effect of the option on entities’ investment decisions and on the usefulness of information to users of financial statements
  • Financial liabilities designated as fair value through profit or loss: Presentation of changes in fair value due to changes in own credit risk in OCI
  • Modifications to contractual cash flows:
    • Differences in drafting between the requirements for modifications for financial assets and financial liabilities
    • Determining when a modification results in derecognition
  • Transition to IFRS 9:
    • Effects of transition reliefs provided
    • Balance of reducing costs for preparers of financial statements and providing useful information to users of financial statements

 

Current status of the project

This project has been completed. The IASB published IFRS Project Report and Feedback Statement: Post-implementation Review of IFRS 9 'Financial Instruments' — Classification and Measurement on 21 December 2022. The Board concluded that the classification and measurement requirements of the standard work as intended, however, the IASB has identified two issues that will need further research.

 

Project milestones

Date Development Comments
October 2020 The Board decides to take up a post-implementation review of the classification and measurement requirements in IFRS 9
30 September 2021 Request for information published Comments requested by 28 January 2022
21 December 2022 IFRS Project Report and Feedback Statement: Post-implementation Review of IFRS 9 'Financial Instruments' — Classification and Measurement published The Board concluded that the classification and measurement requirements of the standard work as intended, however, the IASB has identified two issues that will need further research.

 

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