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EFRAG draft comment letter on proposed amendments to IFRS 9 regarding the classification of certain prepayable financial assets

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

04 May 2017

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB exposure draft ED/2017/3 'Prepayment Features with Negative Compensation (Proposed amendments to IFRS 9)'.

In its draft comment letter, EFRAG welcomes the IASB addressing the concerns related to prepayment features with negative compensation. However, EFRAG is of the view that prepayment features with negative compensation should be subject to the same eligibility conditions as prepayment features with positive compensation; therefore, EFRAG disagrees with the criterion that states that the fair value of the prepayment feature should be insignificant at initial recognition.

In order to minimise any disruption to the implementation efforts already undertaken by preparers and users, EFRAG requests the IASB to do its utmost to finalise the amendments as soon as possible and to ensure they are limited to what is strictly necessary to address the issue submitted to the IFRS Interpretations Committee. EFRAG also recommends that the IASB include an effective date of 1 January 2019, with early application permitted, rather than the date proposed in the amendments.

Comments on EFRAG's draft comment letter are requested by 17 May 2017. For more information, see the press release and the draft comment letter on the EFRAG website.

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