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IFRS – financial instruments: Impairment methodology 

The Boards were 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 in November 2009 (the IASB) and in May 2010 (the FASB), and published a joint supplementary document on recognising impairment in open portfolios in January 2011.


However, at the July 2012 joint meeting the FASB expressed concern about the direction of the joint project and in December 2012 issued an exposure draft of its own impairment model, the current expected credit loss model. Meanwhile, the IASB has continued to develop separately its three-bucket impairment model, and issued a new exposure draft in March 2013.

Timeline:

Impairment methodology


*IFRS 9 (2013) removed the previous 1 January 2015 mandatory effective date of IFRS 9. At the IASB’s February 2014 meeting, the Board tentatively decided that the mandatory effective date of IFRS 9 should be 1 January 2018, but that the final effective date will be determined when the classification and measurement and impairment chapters of IFRS 9 are finalised.

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Chris Spall

Chris Spall

Global IFRS Financial Instruments Leader

+44 20 7694 8445

Terry Harding

Terry Harding

Global IFRS Financial Instruments Deputy Leader

+44 20 7694 8105

Enrique Tejerina

Enrique Tejerina

Global IFRS Financial Instruments Deputy Leader

+1 212 909 5530