1、 First Impressions: IFRS 9 Financial Instruments International Financial Reporting Standards December 2009 Foreword IFRS 9 Financial Instruments was published in November 2009. This is the first instalment of a phased project to replace the existing standard on financial instruments, IAS 39 Financia
2、l Instruments: Recognition and Measurement. The exposure draft (ED) on the impairment phase of the project also has been published recently and will be followed shortly by draft proposals on hedge accounting. Rewriting the existing financial instruments standard is a very ambitious project. It is to
3、 the credit of the International Accounting Standards Board (IASB or Board) that it has been able to achieve so much progress in a few short months in order to meet the urgent calls for change from the Group of Twenty (G20), the Financial Stability Board and others. In doing so the Board has underta
4、ken a major outreach programme, discussing the proposals with a wide range of constituents and responding to the feedback received. As proposed in the ED, the standard retains a mixed measurement model, with some financial assets measured at amortised cost and others at fair value. Retaining but sim
5、plifying the mixed measurement model was an important recommendation of the Financial Crisis Advisory Group. In the current environment we believe that this is the right approach. The distinction between the two measurement models is based on the business model of each entity and a requirement to as
6、sess whether the cash flows of an individual instrument are only principal and interest. This business model approach is a fundamental building block of the new standard and aims to align the accounting with the way that management deploys assets in its business, while also considering the character
7、istics of the assets. While the EDs proposals also would have applied to liabilities, the standard addresses at present only financial assets. This change in scope reflects the complexities of some of the issues around liability measurement, including the remeasurement of own credit risk and embedde
8、d derivatives. Addressing financial assets and liabilities separately is not ideal, but we believe that the Board has made a sensible decision pending further discussion on these issues. Given the far-reaching nature of the IAS 39 replacement project, many entities may need to undertake changes in s
9、ystems and internal reporting in order to comply with its requirements. For this reason we support the Boards decision to set a longer term time horizon for mandatory adoption of the new standard (2013). This also will allow preparers to adopt all phases of the project at once. Importantly, however,
10、 the new standard will be available for early adoption before 2012 without the need to restate comparatives. Early adoption will be a big step for any entity and it remains to be seen how many will choose this route. In some jurisdictions new standards have to be formally adopted before they can be
11、applied. In others there may be specific restrictions on early application. In any event, we expect that many companies will wait until the entire package, including impairment, hedge accounting and financial liabilities, has been finalised before making the change. Furthermore, although there is cl
12、ose dialogue between the IASB and the U.S. Financial Accounting Standards Board (FASB) on changes to financial instruments accounting, it is not as yet clear to what extent full convergence will be achieved on some of the issues. The objective of this publication is to summarise the key aspects of t
13、he standard and to highlight some of the implementation issues which we have identified to date. This publication does not offer our views or interpretations as it would be premature to do so. More time will be needed to discuss the requirements of the standard and consider them in the context of sp
14、ecific transactions. Andrew Vials KPMGs Global IFRS Financial Instruments Leader KPMG International Standards Group 2009 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved. About this publication This publication has been produced by the KPMG International Standards Group (pa
15、rt of KPMG IFRG Limited). We would like to acknowledge the efforts of the principal authors of this publication. Those authors include Ewa Bialkowska, Markus Fuchs and Chris Spall of the KPMG International Standards Group. Content Our First Impressions publications are prepared upon the release of a
16、 new IFRS, interpretation or other significant amendment to the requirements of IFRSs. They include a discussion of the key elements of the new requirements and highlight areas that may impact or change practice. Examples are provided to assist in assessing the impact of implementation. This edition
17、 of First Impressions considers IFRS 9 Financial Instruments issued in November 2009. Other aspects of accounting for financial instruments are dealt with in Insights into IFRS. The text of this publication is referenced to IFRS 9 and to selected other IFRSs in issue at 1 December 2009. References i
18、n the left-hand margin identify the relevant paragraphs. In most cases further analysis and interpretation will be needed in order for an entity to apply IFRSs to its own facts, circumstances and individual transactions. Further, the information contained in this publication is based on the initial
19、observations of the KPMG International Standards Group, and these observations may change as practice develops. Updates to KPMGs views and interpretative guidance and examples on IFRS 9 may be included in Insights into IFRS. Other ways KPMG member firms professionals can help We have a range of publ
20、ications that can assist you further, including Insights into IFRS, IFRS compared to U.S. GAAP , and illustrative financial statements for interim and annual reporting under IFRSs. Technical information is available at . For access to an extensive range of accounting, auditing and financial reportin
21、g guidance and literature, visit KPMGs Accounting Research Online. This Web-based subscription service can be a valuable tool for anyone who wants to stay informed in todays dynamic environment. For a free 15-day trial, go to and register today. 2009 KPMG IFRG Limited, a UK company, limited by guar
22、antee. All rights reserved. Contents 1. Executive summary 4 2. Introduction and background 5 3. Classification 7 3.1 Overview 73.2 Classification guidance in IFRS 9 83.2.1 Introduction 8 3.2.2 Business model 9 3.2.3 Cash flow characteristics 10 3.3 Option to designate financial assets at fair value
23、through profit or loss 153.4 Embedded derivatives 153.5 Designation of investments in equity instruments 173.6 Mapping of old and new categories 194. Measurement 21 4.1 Recognition and measurement 214.2 Investments in equity instruments 214.3 Reclassifications 225. Presentation and disclosures 25 6.
24、 Effective date and transition 27 6.1 Date of initial application 276.2 Classification 286.3 Hybrid instruments 306.4 Effective interest method and impairment 316.5 Unquoted equity investments measured at cost 326.6 Hedge accounting 326.7 Comparatives 336.8 Interim reporting 356.8.1 Disclosures on i
25、nitial adoption 35 6.8.2 Overview of transitional reclassifications 35 7 . First-time adopters 37 8. Future developments 40 2009 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved. 4 First Impressions: IFRS 9 Financial Instruments December 2009 1 . Executive summary The stand
26、ard is part of the International Accounting Standards Boards (IASB) wider project to replace IAS 39 Financial Instruments: Recognition and Measurement over the next year. The standard applies only to financial assets, and not to financial liabilities, within the scope of IAS 39. An exposure draft on
27、 classification and measurement of financial liabilities is planned for the first quarter of 2010. The standard contains two primary measurement categories for financial assets: amortised cost and fair value. The existing IAS 39 categories of “Held-to-maturity” , “Loans and receivables” and “ Availa
28、ble-for-sale” are eliminated and so are the existing tainting provisions for disposals before maturity of certain financial assets. A financial asset is measured at amortised cost if: the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flo
29、ws; and the contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal and interest. All other financial assets are measured at fair value. The standard contains specific guidance on classifying non-recour se financial assets and contr
30、actually linked instruments that create concentrations of credit risk (e.g., securitisation tranches). Financial assets acquired at a discount that may include incurred credit losses are not precluded from the amortised cost classification automatically. The standard contains an option to classify f
31、inancial assets that meet the amortised cost criteria as at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch. Embedded derivatives with host contracts that are financial assets in the scope of IAS 39 are not bifurcated; instead the hybrid finan
32、cial instrument is assessed as a whole for classification under the standard. There is no change to the accounting for embedded derivatives with host contracts that are not financial assets within the scope of IAS 39, such as financial liabilities and non-financial host contracts. If a financial ins
33、trument is measured at fair value, then all changes in fair value are recognised in profit or loss, with one exception. For equity investments which are not held for trading, an entity can choose, on an instrument-by-instrument basis, to recognise gains and losses in other comprehensive income with
34、no recycling of gains and losses into profit or loss and no impairments recognised in profit or loss. If an equity investment is so designated, then dividend income generally is recognised in profit or loss. The standard eliminates the exemption allowing some unquoted equity investments and related
35、derivative assets to be measured at cost. However, it includes guidance on limited circumstances where the cost of such an instrument may be an appropriate estimate of fair value. The classification of an instrument is determined on initial recognition. Reclassifications are made only upon a change
36、in an entitys business model, and are expected to be very infrequent. No other reclassifications are permitted. The standard is effective for annual periods beginning on or after 1 January 2013. Early application is permitted. The standard requires retrospective application with certain exemptions a
37、nd there are detailed transition requirements. If an entity adopts the standard before 1 January 2012, then it does not have to restate comparative information. 2009 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved. 5 First Impressions: IFRS 9 Financial Instruments December
38、 2009 2. Introduction and background The IASB currently is revising its accounting requirements for financial instruments. The objectives of the project include improving the decision-usefulness of financial statements for users by simplifying the classification and measurement requirements for fina
39、ncial instruments. This project aims to replace the existing standard IAS 39 Financial Instruments: Recognition and Measurement. The IAS 39 replacement project, and in particular its timeline, is driven in part by requests for reform from the Group of Twenty (G20) and other constituents. Following t
40、he G20 summit in April 2009, the Leaders Statement called on accounting standard setters, including the International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board (FASB), to work urgently with supervisors and regulators to improve standards and achieve a single
41、 set of high-quality global accounting standards. Following the conclusion of their September 2009 summit, the G20 leaders reiterated this message and called on the accounting setters to complete their convergence project by June 2011 . A phased approach has been adopted in order to accelerate the r
42、eplacement of IAS 39 and address the consequences of the financial crisis as speedily as possible, while giving interested parties an opportunity to comment on the proposals in accordance with the IASBs commitment to due process. The three main phases are: Classification and measurement of financial
43、 instruments. IFRS 9 Financial Instruments (the standard) on classification and measurement of financial assets, the subject of this publication, was published on 12 November 2009. An exposure draft (ED) on classification and measurement of financial liabilities is scheduled to be published in the f
44、irst quarter of 2010, with comments due by the end of June 2010. Impairment of financial assets. ED/2009/12 Financial Instruments: Amortised Cost and Impairment was published on 5 No vember 2009 with a comment deadline of 30 June 2010. See our publication New on the Horizon ED/2009/12 Financial Inst
45、ruments: Amortised Cost and Impairment for further detail on this ED. Hedge accounting. An ED is scheduled to be published in the first quarter of 2010. A final standard incorporating all three phases is scheduled for the fourth quarter of 2010. The Board has not considered the scope of IAS 39 yet.
46、Although the interaction of the scope of IAS 39 with other st andards has resulted in some application and interpretation issues, the scope of the financial instruments replacement standard has not been identified as an immediate priority and it will be considered as part of a later phase of the rep
47、lacement project. At the time of publication, the IASB has issued a number of other exposure documents that form part of, or are relevant to, the IAS 39 replacement project. In March 2009 the IASB published ED/2009/3 Derecognition, which proposes new guidance on when a financial asset should be remo
48、ved from an entitys statement of financial position, and increased disclosures about transfers of assets. The comment period closed on 31 July 2009. In May 2009 the IASB published ED/2009/5 Fair Value Measurement (the fair value measurement ED) which proposes new guidance on the principles to be app
49、lied in determining fair values when IFRSs require or permit use of fair values. The proposed guidance in the fair value measurement ED also would apply to any measurements of the fair values of financial instruments that would be required under the IAS 39 replacement project. The comment period for the fair value measurement ED closed on 28 September 20 09. 2009 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.
