EFRAG has issued a draft endorsement advice letter (with supporting appendices) and a separate Invitation to Comment relating to the endorsement for use in the EU of IFRS 9 Financial Instruments (the Standard). EFRAG is consulting on both its assessment of the Standard against the technical criteria in the EU and on its assessment of whether IFRS 9 is conducive to the European public good (which includes the costs and benefits associated with implementing the Standard).IFRS 9 replaces most of the requirements of IAS 39 Financial Instruments: Recognition and Measurement with a principle-based and less complex standard. IFRS 9 changes the classification requirements for financial assets, using a single approach for all types of financial assets. Only basic lending instruments are potentially eligible for measurement at amortised cost and all other financial assets are measured at fair value. Measuring all non-basic lending instruments at fair value has led to the elimination of the multiple impairment models in IAS39 and the design of a single model based on the principle of expected, rather than incurred, credit losses results in earlier recognition of credit losses. The hedge accounting requirements more closely align hedge accounting with risk management practices.
IFRS 9 becomes effective for annual periods beginning on or after 1 January 2018, with earlier application permitted.
Comments are requested by 30 June 2015.
Document : IFRS_9_Invitation_to_comment_-_May_4_2015_-_final.pdf
Linked Project : click here