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Financial instruments — Classification and measurement

Background

This project forms part of the IASB's comprehensive project on financial instruments. As part of the comprehensive project, the IASB 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 Financial Instruments: Recognition and Measurement expressed during the financial crisis related to its classification and measurement requirements.

The consideration of the classification and measurement of financial assets focused on simplifying and rationalising the categories of financial assets under IAS 39. A significant issue in the classification and measurement of financial liabilities is the treatment of an entity's 'own credit risk'.

 

Current status of the project

The IASB issued IFRS 9 Financial Instruments on 12 November 2009, covering the recognition and measurement of financial assets. IFRS 9 was reissued on 28 October 2010 to incorporate requirements for the recognition and measurement of financial liabilities (and also incorporate requirements for derecognition of both financial assets and financial liabilities). IFRS 9 is effective for annual periods beginning 1 July 2013.

In July 2011, the IASB added an additional project to consider the effective date of IFRS 9, deferring it mandatory application to 1 July 2015.

In November 2011, the IASB agreed to undertake a limited review of IFRS 9, to potentially consider the interaction of the requirements with the insurance contract project, and to reconsider the requirements of IFRS 9 in light of developments in the FASB's project on financial instruments.

 

Project milestones

DateDevelopmentComments
18 June 2009 Discussion Paper DP/2009/2 Credit Risk in Liability Measurement published Comment deadline 1 September 2009
14 July 2009 Staff paper accompanying Discussion Paper DP/2009/2 Credit Risk in Liability Measurement published Comment deadline 1 September 2009
14 July 2009 Exposure Draft ED/2009/7 Financial Instruments: Classification and Measurement published Comment deadline 14 September 2009
12 November 2009 IFRS 9 Financial Instruments issued, covering classification and measurement of financial assets Effective for annual periods beginning 1 July 2013*
11 May 2010 Exposure Draft ED/2010/4 Fair Value Option for Financial Liabilities published Comment deadline 16 July 2010
28 October 2010 IFRS 9 Financial Instruments reissued, incorporating accounting for financial liabilities (and derecognition) Effective for annual periods beginning 1 July 2013*

* Subsequently amended to 1 January 2015.

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