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Deloitte comment letter on proposed limited amendments to IFRS 9

  • Deloitte Comment Letter Image

29 Mar 2013

We've submitted our comment letter on the IASB's ED/2012/4 'Classification and Measurement: Limited Amendments to IFRS 9'. While we support the objective of the proposed amendments, we believe the guidance could be made simpler and clearer, and also call for the IASB and FASB to reconcile any remaining differences in their respective classification and measurement models as far as possible.

The comment letter contains the following observations:

We support the objective of the proposed amendments and the introduction of a third business model as it better captures the spectrum of business models that exist in reality. However, we believe that the third business model would be better defined as a residual category for assets that do not meet the conditions to be considered as held to collect contractual cash flows or as held to sell. This should facilitate the production of simpler, clearer application guidance. Additionally, we encourage the IASB and the FASB to reconcile the differences that currently exist between their proposed application guidance in this area as this would enhance international comparability of financial statements.

In addition, the comment letter makes the following points:

  • the introduction of a benchmark test adds an additional layer of complexity to the cash flow characteristics criterion
  • the proposals do not address the accounting for financial instruments in economies where rates are not set by the forces of supply and demand, but by the government or related agencies
  • we ask the IASB to reconsider the effective date of IFRS 9 in light of the delays in completing IFRS 9.

The full comment letter can be accessed here.

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