31. January 2022

ASCG submits comment letter on the PiR of IFRS 9

On 28 January 2022, the ASCG has submitted its comment letter on the Post-implementation Review (PiR) of IFRS 9 – Classification and Measurement to the IASB.

Therein, we are generally positive about the existing principles and requirements for classification and measurement of financial instruments and their application. However, we have identified and commented on some issues that are challenging and potentially provide room for clarification or amendments. These issues comprise

  • nature and extent of applying the effective interest rate method and the SPPI criterion to certain financial instruments with ESG features,
  • subsequent accounting for equity instruments classified at Fair Value through OCI, in particular the so-called non-recycling requirement, and
  • the modification requirements which are deemed unclear and whose interaction with the impairment and derecognition requirements is challenging.

For some issues, we point to different experiences and challenges when being applied in different industries. As regards the issue of financial instruments with ESG features, we suggest the IASB to work towards a solution within a separate and potentially accelerated project.