Post-implementation Review of IFRS 9—Hedge Accounting

In July 2014 the IASB issued IFRS 9 Financial Instruments. The Standard was effective for annual periods commencing on or after 1 January 2018. Insurers could defer the effective date until 1 January 2023 to align with the implementation of IFRS 17 Insurance Contracts if certain conditions were met.

IFRS 9 replaced IAS 39 Financial Instruments: Recognition and Measurement. It changed accounting requirements in three main areas for financial instruments: classification and measurement, impairment (introduction of the Expected Credit Loss model) and hedge accounting.

The IASB is required by its due process to conduct a post-implementation review of the all new IFRS standards and major amendments. The objective of a post-implementation review is to assess whether the effects of applying the new requirements on users of financial statements, preparers, auditors and regulators are as intended when the IASB developed those new requirements.

The IASB divided its overall post-implementation review of IFRS 9 into three phases:

• Classification and Measurement – The IASB published a Request for Information Post-implementation Review of IFRS 9 - Classification and Measurement in September 2021.

The UKEB’s response to the IASB’s Request for Information was submitted on 28 January 2022. For more information see Post Implementation Review of IFRS 9 - Classification and Measurement.

In December 2022, the IASB concluded this stage of the Post-implementation Review. As a result, the IASB published a Project Report and Feedback Statement. In addition, in response to stakeholder feedback the IASB proposed amendments to IFRS 9. For UKEB work on the amendments see
Financial Instruments – Amendments to the Classification and Measurement

• Impairment – The IASB published a Request for Information: Post-implementation Review of IFRS 9 Financial Instruments—Impairment in May 2023.

The UKEB’s response to the IASB’s Request for Information was submitted on 26 September 2023. For more information see Post-Implementation Review of IFRS 9 –Impairment.

In July 2024, the IASB concluded this stage of the Post-implementation Review. As a result, the IASB published a Project Summary and Feedback Statement.

• Hedge Accounting - The information on this page focuses on the post-implementation review of IFRS 9 hedge accounting.

The objective of the hedge accounting requirements in IFRS 9 is to represent, in the financial statements, the effect of an entity’s risk management activities that use financial instruments to manage exposures arising from particular risks that could affect profit or loss (or other comprehensive income, in the case of investments in equity instruments for which an entity has elected to present changes in fair value in other comprehensive income).

An entity may, as an accounting policy choice:

• continue to apply IAS 39 to all hedge relationships; or
• apply IFRS 9, either to:
  • all hedge relationships; or
  • all hedge relationships except for fair value hedges of the interest rate exposure of a portfolio of financial assets or financial liabilities (macro hedge accounting), for which it may apply the specific requirements in IAS 39.

The UKEB outreach plan includes discussions with stakeholders and public consultation on the UKEB’s Draft Comment Letter (DCL) expected to be published in December 2026.