Embedded Derivatives (Amendments to IFRIC 9 and IAS 39)
In March 2009, the IASB issued Embedded Derivatives (Amendments to IFRIC 9 and IAS 39).
The full text of the amendments to IFRIC 9 and IAS 39 is available for eIFRS Basic and Professional users or printed copies will be available to purchase from our online shop soon.
The amendments result from the exposure draft Embedded Derivatives (Proposed amendments to IFRIC 9 and IAS 39) published on 22 December 2008. The comment deadline was 21 January 2009.
Click here to view the Exposure Draft.
Click here to view comment letters on the Exposure Draft.
Reason for the amendments
The amendments were made in response to requests received from those taking part in the recent round-table discussions organised by the IASB and the US Financial Accounting Standards Board (FASB) to clarify the requirements in IAS 39 Financial Instruments: Recognition and Measurement and IFRIC 9 Reassessment of Embedded Derivatives.
Participants asked the IASB to act in order to prevent any diversity in practice developing as a result of the amendments made to IAS 39 in October 2008, which permit the reclassification of particular financial assets.
Scope of the amendments
The amendments are of limited scope. The amendments apply to embedded derivatives within the scope of IFRIC 9 and IAS 39.
Effect of the amendments
The amendments clarify that on reclassification of a financial asset out of the 'at fair value through profit or loss' category all embedded derivatives have to be assessed and, if necessary, separately accounted for in financial statements.