IAS 39 — Participation rights and calculation of the effective interest rate

Date recorded:

The staff noted that the submitter had filed a very specific fact pattern, on which basis the staff made the analysis and asked whether the instrument (which participated in the losses of the entity) is subject to paragraph AG8 of IAS 39 Financial Instruments: Recognition and Measurement for non-floating rate instruments.

The staff recommended not to add the issue to the agenda as the guidance in IAS 39.AG8 was applicable and clear. While all IFRIC members seemed to agree with this conclusion, some were concerned over the assumptions made, particularly that the instrument does not contain an embedded derivative. It was agreed to make clear, in the final wording for the tentative agenda decision, that the assumption that the instrument does not contain an embedded derivative is accepted as a fact, and not specifically addressing that issue does not necessarily mean that the IFRIC concurs with this conclusion.

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