Work plan

Date recorded:

Timing of post-implementation reviews for impairment and hedge accounting requirements of IFRS 9, for IFRS 15 and for IFRS 16 (Agenda Paper 8)


The Due Process Handbook (DPHB) explains that a post-implementation review (PIR) normally begins after a new IFRS Standard has been applied internationally for two years, which is generally about 30-36 months after the effective date. IFRS 9 and IFRS 15 have been effective for 46 months (i.e. since 1 January 2018) and IFRS 16 for 34 months (i.e. since 1 January 2019). It follows that the earliest the PIRs of IFRS 9 and IFRS 15 could have begun is around July 2020 to January 2021 and the PIR of IFRS 16 around July 2021 to January 2022.

Some stakeholders have in the past expressed the view that the timeframe indicated by the DPHB may be too short in some circumstances. The majority of stakeholders said the two years of application indicated by the DPHB was not long enough and suggested three or four years instead. Most of those stakeholders suggested there be a level of flexibility in timing to take into account the specific circumstances of the Standard.

The staff partially agree with the concerns and analysed whether there is sufficient information available to start the PIR of the remaining parts of IFRS 9, IFRS 15 and IFRS 16.

Staff recommendations

Considering the analysis in the paper, the staff suggested the Board begin the PIR of the impairment requirements of IFRS 9, and of IFRS 15 in the second half of 2022. The staff think that sufficient information would be available by then for the Board to begin the PIR.

The staff think the Board should consider in the second half of 2022 when to begin the PIR of the hedge accounting requirements of IFRS 9, and IFRS 16 as it is too early at this stage to begin the PIR.

Board discussion

Board members discussed mainly whether the PIR on IFRS 9 impairment and hedge accounting should be done at the same time or at different times. Proponents of doing the two PIRs together said that doing it at one time would bring more attention to the PIR. Also, one Board member did not expect many issues to come up in the hedge accounting PIR.

Opponents said that splitting the two has no adverse effect on preparers as there is no overlap between the two. The impairment PIR is overdue, while for the hedge accounting PIR there was not enough information yet. It is also targeted at different groups. The Board might also be too occupied with PIRs if IFRS 9 impairment and hedge accounting was done together with IFRS 15. Furthermore, preparers expressed concern that separating the classification and measurement PIR might mean that the Board has no appetite to do the impairment PIR. This perception should be avoided and the impairment PIR started next year.  

One Board member said that whatever the decision, the Board needed to explain why they were doing the hedge accounting PIR later. He was concerned that this was solely based on messages from Europe, where banks have not switched to the IFRS 9 model because they want to wait until DRM is finalised. However, there are other banks outside Europe that already apply IFRS 9 hedge accounting.

On IFRS 15, one Board member said that the Board should not wait too long with the PIR as once the preparers have started to settle on the accounting, they would not want any change anymore.

On IFRS 16, one Board member said that it makes sense to wait as the Standard has been disrupted by the pandemic (and the Board’s response to it). However, one Board member said that for some companies it might make sense to do IFRS 15 and 16 at the same time as there may be overlap. This was echoed by the Chairman who said that there are companies that have cross-cutting issues between the two Standards and that the staff should do some research as to how many companies that would be. The Board could then decide in the second half of 2022 whether the IFRS 16 PIR should be done together with that of IFRS 15. One Board member said however that there may not be enough evidence to start IFRS 16 early.

The Board agreed unanimously that the PIR for IFRS 9 impairment and IFRS 15 should be started in the second half of 2022 and the Board would consider at the same time when to begin the PIR for IFRS 9 hedge accounting and IFRS 16.

Related Meeting Notes

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