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The International Accounting Standards Board (IASB) published the Exposure Draft Amendments to the Classification and Measurement of Financial Instruments in March 2023. The IASB is considering the feedback on the Exposure Draft in finalising the amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures.

IASB® Update February 2024

The IASB met on 21 February 2024 to discuss feedback on the Exposure Draft Amendments to the Classification and Measurement of Financial Instruments, which proposed amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures.

The IASB discussed:

  • the prospective disclosure requirements relating to contractual cash flows (Agenda Paper 16A);
  • the proposed effective date and transition requirements (Agenda Paper 16B);
  • due process steps (Agenda Paper 16C); and
  • proposals related to the disclosure requirements for subsidiaries without public accountability (Agenda Paper 16D).

The disclosure requirements relating to contractual cash flows (Agenda Paper 16A)

The IASB tentatively decided to finalise the disclosure requirements proposed in paragraphs 20B–20C of the Exposure Draft, subject to:

  1. limiting the requirements to contractual terms that could change the amount of contractual cash flows based on a contingent event that is not directly related to a change in basic lending risks or costs; and
  2. changing the requirement to disclose quantitative information to permit an entity to disclose information other than the range of possible adjustments to contractual cash flows.

All 14 IASB members agreed with this decision.

The effective date and transition requirements (Agenda Paper 16B)

The IASB tentatively decided to set an effective date of annual reporting periods beginning on or after 1 January 2026.

Eight of 14 IASB members agreed with this decision.

The IASB also tentatively decided:

  1. to finalise the transition requirements proposed in the Exposure Draft; and
  2. to permit early application of the amendments to the requirements related to solely payments of principal and interest and the disclosure requirement in IFRS 7 relating to changes in contractual cash flows, separately from the other amendments.

All 14 IASB members agreed with this decision.

Due process steps (Agenda Paper 16C)

The IASB tentatively decided to begin the balloting process for the prospective amendments to IFRS 9 and IFRS 7 without re-exposing the IASB’s tentative revisions to these prospective amendments.

All 14 IASB members agreed with this decision.

Two IASB members indicated that they are considering dissenting from issuing the amendments.

Reduced disclosure requirements for subsidiaries without public accountability (Agenda Paper 16D)

For the ‘catch-up’ exposure draft the IASB plans to publish after it issues the prospective IFRS Accounting Standard Subsidiaries without Public Accountability: Disclosures later in 2024, the IASB decided:

  1. to not include the prospective amendments to IFRS 7 relating to equity instruments designated at fair value through other comprehensive income; and
  2. to include the prospective amendments to IFRS 7 relating to changes in contractual cash flows.

All 14 IASB members agreed with this decision.

Next milestone

Final Amendment