{"id":2312,"date":"2024-05-31T14:11:43","date_gmt":"2024-05-31T06:11:43","guid":{"rendered":"https:\/\/ehluar.com\/main\/?p=2312"},"modified":"2025-08-18T14:16:04","modified_gmt":"2025-08-18T06:16:04","slug":"key-amendments-to-financial-instrument-classification-measurement-rules","status":"publish","type":"post","link":"http:\/\/ehluar.com\/main\/2024\/05\/31\/key-amendments-to-financial-instrument-classification-measurement-rules\/","title":{"rendered":"Key Amendments to Financial Instrument Classification & Measurement Rules"},"content":{"rendered":"\n

The International Accounting Standards Board (IASB) has issued targeted amendments to the classification, measurement, and disclosure requirements for financial instruments under IFRS 9 Financial Instruments<\/em> and IFRS 7 Financial Instruments: Disclosures<\/em>. These changes address specific implementation challenges identified during the post-implementation review of IFRS 9.<\/p>\n\n\n\n

The amendments, effective for annual reporting periods beginning on or after 1 January 2026<\/em>, provide critical clarifications in several areas:<\/p>\n\n\n\n

    \n
  1. Classification of Financial Assets (including ESG-linked assets):<\/strong>\n
      \n
    • Provides clearer guidance for assessing if a financial asset’s contractual cash flows are “solely payments of principal and interest” (SPPI), particularly relevant for assets with environmental, social, and governance (ESG) features.<\/li>\n\n\n\n
    • Clarifies the definition of ‘non-recourse’<\/em>. A financial asset is non-recourse if the holder’s contractual right to cash flows is limited solely to the cash flows generated by specific underlying assets.<\/li>\n\n\n\n
    • Refines the characteristics distinguishing contractually linked instruments<\/em> (like securitisations) from other transactions for SPPI assessment purposes.<\/li>\n<\/ul>\n<\/li>\n\n\n\n
    • Derecognition of Financially Settled Liabilities:<\/strong>\n
        \n
      • Offers explicit guidance on when an entity can consider a financial liability settled via an electronic payment system <\/em>(e.g., real-time gross settlement) to be derecognised before<\/em> the actual cash settlement date, provided specific criteria are met. This addresses practical settlement timing issues.<\/li>\n<\/ul>\n<\/li>\n\n\n\n
      • Enhanced Disclosures:<\/strong>\n
          \n
        • Amends IFRS 7 disclosure requirements concerning investments in equity instruments designated at fair value through other comprehensive income (FVTOCI)<\/em>.<\/li>\n\n\n\n
        • Modifies disclosure rules related to contractual terms<\/em> that could alter the timing or amount of contractual cash flows contingent on events not<\/em> directly related to fundamental lending risks and costs.<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n\n\n\n

          These narrow-scope amendments stem directly from feedback received during the IASB’s post-implementation review of IFRS 9. Their primary goal is to reduce diversity in practice, improve consistency, and address specific application challenges encountered by preparers, particularly concerning ESG-linked instruments and modern payment systems. The 2026 effective date provides entities sufficient time to prepare for implementation.<\/p>\n\n\n\n

          Source:<\/strong> IASB, 30 May 2024.<\/p>\n","protected":false},"excerpt":{"rendered":"

          The International Accounting Standards Board (IASB) has issued targeted amendments to the classification, measurement, and disclosure requirements for financial instruments under IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures. These changes address specific implementation challenges identified during the post-implementation review of IFRS 9. The amendments, effective for annual reporting periods beginning on or […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[7,8,6],"tags":[],"class_list":["post-2312","post","type-post","status-publish","format-standard","hentry","category-accounting","category-incometax","category-techupdates"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/2312","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/comments?post=2312"}],"version-history":[{"count":1,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/2312\/revisions"}],"predecessor-version":[{"id":2313,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/2312\/revisions\/2313"}],"wp:attachment":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/media?parent=2312"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/categories?post=2312"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/tags?post=2312"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}