Financial Instruments 

Phase 1: Classification and measurement

• IFRS 9 (2009) and IFRS 9 (2010) contain the requirements for the classification and measurement of financial assets and financial liabilities. Effective date – January 1, 2015.
• The IASB recently issued an Exposure Draft (ED) that proposes limited amendments to IFRS 9 on the classification and measurement of financial instruments. The IASB decided to propose the amendments to address a narrow range of application questions, reduce key differences between the IASB and FASB models, and take into account the interaction with tentative decisions on accounting for insurance contract liabilities.

Phase 2: Impairment methodology

• The IASB and FASB began working jointly on a model for the impairment of financial assets based on expected credit losses, which would replace the current incurred loss model in IAS 39.
• The Boards previously published their own differing proposals and later published a joint supplementary document on recognising impairment in open portfolios in January 2011.
• At the July 2012 joint meeting, the FASB expressed concern about the direction of the joint project and began developing its own impairment model. The prospects for convergence in this area no longer look promising.

Phase 3: Hedge accounting

• Two parts: general hedging and macro hedging.
• A review draft of a general hedging standard was released in September 2012, with the standard expected to be finalized in early 2013.
• A discussion paper for the macro hedging model is scheduled for the first half of 2013.

In addition, the IASB undertook a related project on offsetting of financial assets and financial liabilities.

• The IASB published amendments to IAS 32 and IFRS 7 on December 16, 2011.
• Amendments add disclosure requirements to IFRS 7 and are effective for annual and interim periods beginning on or after January 1, 2013.
• Amendments clarify the offsetting criteria in IAS 32 and are effective for annual periods beginning on or after January 1, 2014.