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.
EFRAG's overall preliminary assessment is that IFRS 9 satisfies the criteria for endorsement for use in the EU and therefore recommends its endorsement.
EFRAG has been seeking comments on all aspects of its analyses supporting its preliminary conclusions.
EFRAG emphasises that it has reached its preliminary conclusions relying on limited quantitative assessments, despite its efforts to gather quantitative data, in particular on the impact of the new impairment model. Input received reflects that these quantitative data may not be available on a broad basis before 2017. EFRAG wishes to assess whether its preliminary conclusion that it would be detrimental to European public good to delay IFRS 9 endorsement is supported by European stakeholders.
Finally, EFRAG wishes to gain more insight into the impact on financial reporting by insurance businesses of adopting IFRS 9 before the effective date of the future insurance contracts standard to comfort its view that the IFRS 9 mandatory effective date should be deferred for all insurance businesses until the new insurance contracts standard is implemented or becomes of mandatory application.
The DEA can be found here
Comments were requested by 30 June 2015.
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EFRAG requests comments on its draft endorsement advice on the Amendments to IFRS 10, IFRS 12 and IAS 28
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 Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28) (the Amendments). EFRAG is consulting on both its assessment of the Amendments against the technical criteria in the EU and on its assessment of whether the Amendments are conducive to the European public good.
EFRAG has issued a draft endorsement advice letter and a separate invitation to comment relating to the endorsement for use in the EEA ofInvestment Enitities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28) ('the Amendments').
The Amendments clarify the requirements when accounting for entities that qualify as investment entities under IFRS 10 Consolidated Financial Statements. The Amendments also provide relief in certain circumstances, which will reduce the costs to preparers of applying IFRS.
The Amendments become effective for annual periods beginning on or after 1 January 2016, with earlier application permitted.
EFRAG's overall preliminary assessment is that the Amendments satisfy the criteria for endorsement for use in the EU and therefore recommends its endorsement.
EFRAG has been seeking comments on all aspects of its analyses supporting its preliminary conclusions.
The draft endorsement advice can be found here
Comments were requested by 19 June 2015.
EFRAG has also updated its Endorsement Status Report, which can be downloaded here on EFRAG's web page.
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