Draft Comment Letter published: Post-implementation Review: IFRS 9 Financial Instruments - Classification and Measurement

Date: 17 December 2021

The UK Endorsement Board (UKEB) has published its Draft Comment Letter in response to the IASB’s Request for Information (RFI) on its Post-implementation Review of IFRS 9 Financial Instruments – Classification and Measurement.

The Draft Comment Letter notes that the IFRS 9 classification and measurement requirements generally work as intended and represent an improvement to the previous rule-based requirements in IAS 39 Financial Instruments: Recognition and Measurement.

Our response to the RFI focuses on the three significant areas where we consider that improvement, and potentially standard setting activity, is required. Two areas of concern relate to the application of the contractual cash flow characteristics assessment for financial assets (financial instruments with sustainability-linked features and contractually linked instruments and non-recourse finance), while the third relates to the effective interest rate methodology.

In addition, given its potential widespread implications, we suggest the IASB addresses the issue considered in the recent IFRS Interpretations Committee tentative agenda decision Cash Received via Electronic Transfer as Settlement for a Financial asset as part of this Post-implementation Review.

The UKEB will consider all stakeholder feedback received by 10 January 2022 for inclusion in its final comment letter to the IASB. 

A link to the Draft Comment Letter and the Invitation to Comment can be found here.