The International Accounting Standards Board (IASB) has published the Exposure Draft Amendments to the Classification and Measurement of Financial Instruments, which proposes amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures.
The Exposure Draft responds to the feedback received from a post-implementation review of IFRS 9 – classification and measurement requirements, that indicating the specific areas in the requirements, in relation to some matters, should be clarified to improve their understandability.
In particular, the Exposure Draft proposes amendments to the requirements in IFRS 9, relating to:
(a) derecognition of a financial liability settled through electronic transfer – to clarify that an entity is required to apply settlement date accounting when derecognising a financial asset or a financial liability; and 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.
(b) classification of financial assets – to clarify the application guidance for assessing the contractual cash flow characteristics of financial assets, including:
(i) financial assets with contractual terms that could change the timing or amount of contractual cash flows, for example, those with ESG-linked features;
(ii) financial assets with non-recourse features; and
(iii) financial assets that are contractually linked instruments.
The Exposure Draft also proposes to make amendments or additions to the disclosure requirements in IFRS 7 for:
(a) investments in equity instruments designated at fair value through other comprehensive income; and
(b) financial instruments with contractual terms that could change the timing or amount of contractual cash flows on the occurrence (or non-occurrence) of a contingent event.
The IASB will consider the comments it receives on the Exposure Draft and will decide whether to proceed with the proposed amendments.
Click here to download the Exposure Draft and the Snapshot.
Invitation to comment
The Exposure Draft is open for comment until 19 June 2023.
You may provide your comments via email to us at technical@masb.org.my.
Click here to submit your comments.