The International Accounting Standards Board (IASB) published this week an exposure draft proposing amendments to the classification and measurement requirements in IFRS 9 – Financial Instruments.
The proposed amendments respond to feedback received from the IFRS 9 Post Implementation Review (PIR) on classification and measurement, which concluded in December 2022.
In response to feedback received, the exposure draft’s proposed amendments include:
- On Financial assets with ESG-linked features: The IASB decided against creating an exception for assets with ESG-linked features, but responded to the PIR feedback by proposing clarifications to the general SPPI principles in IFRS 9 together with additional examples of applying these principles. Specifically, the IASB proposes to clarify the requirements on: A) Elements of interest in a basic lending arrangement and B) Contractual terms that change the timing or amount of contractual cash flows.
- On Investments in equity instruments designated at fair value through other comprehensive income: the IASB proposed amendments to IFRS 7 to require entities to disclose additional information about the amounts accumulated in OCI.
- On the derecognition of financial liabilities settled through electronic transfers: The IASB proposes to: A) clarify that an entity uses settlement date accounting when recognising or derecognising financial assets and financial liabilities; and B) develop new requirements to permit an entity to deem a financial liability that is settled using an electronic payment system to be discharged before the settlement date if specified criteria are met.
The IASB ED is open for comment until 19 July 2023.
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