IAS Plus newsletter — Amendments to IAS 39 & IFRS 7 - Reclassification of financial assets.
On 13 October 2008, the International Accounting Standards Board (IASB) published amendments to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures.
The amendments are a response to calls from constituents, particularly within the European Union, to create a ‘level playing field’ with US GAAP regarding the ability to reclassify financial assets. The changes to IAS 39 permit an entity to reclassify non-derivative financial assets out of the ‘fair value through profit or loss’ (FVTPL) and ‘available-for-sale’ (AFS) categories in limited circumstances. Such reclassifications will trigger additional disclosure requirements.
On 24 October 2008, in response to queries raised by practitioners, the IASB issued clarifying guidance in its October Update regarding the effective date of the amendments and transitional provisions. This newsletter has been updated to reflect that supplementary guidance.
