IASB publishes amendments to IFRS 9 and IFRS 7
On 30 May 2024, the IASB published its final amendments on the classification and measurement of financial instruments, which address certain application difficulties identified by the IASB during its Post-implementation Review of IFRS 9.
The main purpose of the amendments is to:
- clarify the classification of financial assets with environmental, social and corporate governance (ESG) and similar features, non-recourse instruments and contractually linked instruments, indicating how the SPPI test should be conducted in these particular cases;
- clarify that the settlement date is the date on which financial liabilities are derecognised, while offering preparers an accounting policy choice to derecognise financial liabilities settled via an electronic payment system before that date.
At the same time, the IASB has amended IFRS 7 to introduce additional disclosures on:
- equity instruments measured at fair value through equity;
- financial instruments with contingent contractual terms.
These amendments are effective for annual reporting periods beginning on or after 1 January 2026, with the option of early application, either in their entirety or only in respect of the classification of financial assets.
These amendments are also applicable retrospectively, with no requirement to restate comparative periods.