Financial instruments (Comprehensive project) – Effective date of IFRS 9

Date recorded:

The mandatory effective date for the classification and measurement and derecognition sections of IFRS 9 is currently 1 January 2013. The basis for conclusion of IFRS 9 references that the Board expects transition of all phases of the IAS 39 replacement project to occur concurrently and that it may delay the effective date to align with the effective date of the forthcoming insurance standard. However, based on the progress of the hedge accounting (including macro hedging) and impairment projects, it has become questionable whether 1 January 2013 is still a realistic effective date to finalise all portions of the standard and provide sufficient time for implementation. Additionally, the insurance project is still ongoing and an effective date has not yet been determined. Based on the above, the staff recommended to the Board to delay the mandatory effective date to annual periods beginning on or after 1 January 2015.

One of the IASB members strongly opposed delaying the effective date of IFRS 9 for various reasons but primarily because of the unintended message that constituents could infer. He was also concerned over the precedent that could be set in that a regulator or standard setter could view not endorsing a new standard as a means to delay or reopen it for consideration.

Many other IASB members sympathised with the concerns of the Board member, but still supported the staff recommendation for deferral. One Board member questioned whether 2015 was the appropriate date and if 2016 may be more appropriate. Several Board members emphasised that it would be important how the deferral were communicated so that misinterpretations over the deferral did not occur.

The Board tentatively agreed to defer the mandatory effective date of IFRS 9 to annual periods beginning on or after 1 January 2015 with early application still permitted. The deferral of IFRS 9 will be proposed in an exposure draft with a 60 day comment period.

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