The Singapore Accounting Standards Council (ASC) has submitted a comment letter to the International Accounting Standards Board (IASB) on ED/2017/3 Prepayment Features with Negative Compensation (Proposed amendments to IFRS 9) which was issued in April 2017.
In their comments, ASC agreed to the proposal that applying the effective interest method to particular financial assets that are within the scope of the Exposure Draft can provide useful information about those financial assets’ performance.
The ASC has further made the following recommendations:
(a) to allow practice to develop on ‘reasonable additional compensation’, as it would for any other terms used in principle-based IFRS Standards.
(b) it cannot over-emphasise the importance of the IASB completing its re-deliberations and issuing the final amendments expeditiously, in view of only 6 months left to the proposed effective date on 1 January 2018
(c) to consider making available those existing transition provisions relating to contractual cash flow characteristics and impairment to entities that have applied IFRS 9 before they apply the exception.
For further reading and more details on the comments sent, the complete comment letter can be downloaded from the ASC website.
Source: ASC, 23 May 2017