The ED was issued by the IASB on 14 July 2009 as the first part of its three-phase project to replace IAS 39 Financial Instruments: Recognition and Measurement. The Board decided to address classification and measurement of financial assets and financial liabilities first because they form the foundation of a standard on reporting financial instruments. Moreover, many of the concerns about IAS 39 that have been expressed during the financial crisis relate to its classification and measurement requirements. The IASB plans to finalise the classification and measurement proposals in time for non-mandatory application in 2009 year-end financial statements. The other two phases of the IAS 39 project are addressing Impairment and Provisioning and Hedge Accounting. Additionally, the Board's project on Derecognition of Financial Instrument will also result in amendments to IAS 39. The IASB plans to complete the replacement of IAS 39 during 2010, although mandatory application will not be before January 2012. The classification and measurement ED proposes that a financial asset or financial liability would be measured at amortised cost if two conditions are met: The instrument has basic loan features and it is managed on a contractual yield basis. A financial asset or financial liability that does not meet both conditions would be measured at fair value. This would include all investments in equity instruments (and derivatives on those equity instruments) – including those that do not have a quoted market price in an active market. The existing IAS 39 classifications of 'held to maturity' and 'available for sale' would be eliminated.