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Friday 19 September 2014

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IFRS 9: Financial Instruments

IASB Meeting Summaries and Observer Notes


 IASB September 2012


 

One IASB member was not able to be present for this session. Consequently, only fourteen IASB members voted on each issue.

At this meeting, the IASB discussed:

  1. relief to accelerate the application of the own credit requirements introduced by IFRS 9 (that is, the requirement to present fair value gains or losses attributable to changes in the issuer’s own credit risk in the statement of Other Comprehensive Income for financial liabilities measured under the fair value option);
  2. additional transition issues for the limited amendments to IFRS 9 (including a related issue for impairment); and
  3. due process considerations for issuing an Exposure Draft proposing limited amendments to IFRS 9.

Presentation of ‘own credit’ gains and losses on financial liabilities

The IASB tentatively decided to propose an amendmen t to IFRS 9 that would allow an entity to early apply only the requirements for the presentation of fair value gains or losses attributable to changes in the issuer’s own credit risk, without the need to early apply IFRS 9 in its entirety. Twelve IASB members agreed.

Additional transition issues

Prior-period disclosures for classification and measurement (C&M)

The IASB tentatively decided to confirm that in the period in which IFRS 9 is initially applied, disclosure of the line item amounts that would have been reported in prior periods in accordance with the C&M model in IFRS 9 should not be required. Twelve IASB members agreed.<

Current-period disclosures for C&M

The IASB tentatively decided that in the period in which IFRS 9 is initially applied, disclosure of the current-period line item amounts that would have been reported in accordance with the C&M model in IAS 39 should not be required. Fourteen IASB members agreed.

Current-period disclosures for impairment

  1. Notwithstanding its tentative decision in July 2012 , the IASB tentatively decided that in the period in which IFRS 9 is initially applied, disclosure of the current-period line item amounts that would have been reported in accordance with the impairment model in IAS 39 should not be required.
  2. On the date of initial application of IFRS 9, the IASB tentatively decided to require a disclosure that would permit reconciliation of the ending impairment allowances under IAS 39 to the opening impairment allowances under IFRS 9 by measurement category, showing separately the effect of reclassifications on the allowance balance at that date.

Thirteen IASB members agreed.

Phased early application of IFRS 9

The IASB tentatively decided that once IFRS 9 is finalised, earlier versions of IFRS 9 should be withdrawn on a date 6 months after the publication of the final version of IFRS 9. Fourteen IASB members agreed.
Due Process

The IASB discussed whether the IASB has complied with all the required steps in the Due Process Handbook, and has performed sufficient optional due process steps in developing the proposed limited amendments to IFRS 9, to be able to proceed to issuing an Exposure Draft.

All IASB members present agreed that the staff should begin the balloting process for the Exposure Draft, and that the Exposure Draft should have a comment period of 120 days.

One IASB member stated an intention to dissent from the Exposure Draft, and two others stated that they are considering dissenting to the proposal.

Date: 9/26/2012