IAS 39/IFRS 7 – Reclassification of financial assets


In October 2008 the IASB received requests, particularly from within the European Union, to address differences between the reclassification requirements of IAS 39 Financial Instruments: Recognition and Measurement and US GAAP (SFAS No. 115 Accounting for Certain Investments in Debt and Equity Securities and  SFAS 65 Accounting for Certain Mortgage Banking Activities).  In particular, US GAAP permits non-derivative financial assets held for trading and available-for-sale financial assets to be reclassified in particular situations.

The request to address this issue was urgent in light of the global financial crisis and the IASB decided to bypass its usual due process (as agreed by the Trustees) and immediately issue an amendment.


Current status of the project

This project has been completed.  The IASB issued Reclassification of Financial Assets (Amendments to IAS 39 and IFRS 7) on 13 October 2008.

Following the issue of the amendments, constituents told the IASB that there was uncertainty about the interaction between the amendments and IFRIC 9 Reassessment of Embedded Derivatives regarding the assessment of embedded derivatives.  In order to address these issues, the IASB issued Embedded Derivatives (Amendments to IFRIC 9 and IAS 39) on 12 March 2009.


Project milestones

13 October 2008 Reclassification of Financial Assets (Amendments to IAS 39 and IFRS 7) issued Amendments effective 1 July 2008
23 December 2008 Embedded Derivatives (Proposed amendments to IFRIC 9 and IAS 39) published Comment deadline 21 January 2009
12 March 2009 Embedded Derivatives (Amendments to IFRIC 9 and IAS 39) issued Amendments effective for annual periods ending on or after 30 June 2009

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