Editor’s Note: In 2009, the IASB issued IFRS 9, Financial Instruments, providing guidance on the classification and measurement of financial assets. In 2010, the IASB amended the standard, adding guidance on the classification and measurement of financial liabilities and the derecognition of financial instruments. The IASB recently added a project to its agenda to consider limited changes to the classification and measurement requirements in IFRS 9 to address the interaction with the joint project on insurance contracts, application (e.g., the application of the contractual cash flows characteristics test), and potential convergence with the FASB’s tentative model. Currently, IFRS 9 prohibits both the categorization of investments in debt instruments as FV-OCI and the bifurcation of embedded derivatives from a financial asset host. The FASB’s tentative model does permit certain investments in debt instruments to be classified as FV-OCI and requires bifurcation of embedded derivatives from financial asset hosts when certain criteria are met. IFRS 9 is effective beginning January 1, 2015, for IFRS-applying entities.

The FASB has substantially completed its redeliberations on its model for the classification and measurement of financial instruments. However, earlier this month, the Board signaled that it may revisit certain tentative decisions made to date. Further, the FASB still needs to redeliberate the scope, effective date, and transition method for its model.