Proposed minor amendments to IFRS 9 open for comment until 24 May 2017

On 21 April 2017, the IASB published an exposure draft aimed at aiding implementation of the new financial instruments Standard, in particular by introducing a narrow exception to IFRS 9 enabling entities to measure at amortised cost certain financial assets that would otherwise have contractual cash flows that are solely payments of principal and interest but do not qualify to be measured at amortised cost or at fair value through other comprehensive income as a result of a prepayment feature.

For more information:


The following is a summarised update on the main tentative decisions taken by the IASB at its meeting on 24 and 27 April 2017. Additional discussions included Insurance Contracts (strategy for supporting implementation of imminent IFRS 17), Rate-regulated Activities (developing a new accounting model to recognise regulatory assets and liabilities), and Primary Financial Statements (educational session by FASB).

For more detailed and comprehensive information on the IASB’s discussions:

Clarifying amendment to IFRS 9 (as part of the next Annual Improvements Cycle)

In carrying out the ‘10 per cent’ test when assessing whether the terms of an exchange or a modification of a financial liability are substantially different and lead to the derecognition of the original financial liability, an entity should include only fees exchanged between the lender and the borrower (including fees paid or received by either the entity or the lender on the other’s behalf, but excluding fees paid to / received from other parties). The amendment should apply prospectively to modifications / exchanges of financial liabilities that occur on or after the beginning of the annual reporting period in which the entity first applies the amendment.

Plan Amendment, Curtailment or Settlement / Availability of a Refund (amendments to IAS 19 and IFRIC 14 due H2/2017)

Minor plan events should not be excluded from the scope of the amendments. On transition, amendments to IFRIC 14 are to be applied retrospectively (with an exemption for adjustments to the carrying amount of assets outside the scope of IAS 19), and the amendments to IAS 19 should apply prospectively to plan events occurring on or after the effective date (yet to be determined), with no relief for first-time adopters.

Previously Held Interests in a Joint Operation (amendments to IFRS 3 and IFRS 11 due Q4/2017)

The amendments should be finalised with no substantive changes to the exposure draft. Thus, when an entity obtains control of a business that is a joint operation, it should remeasure its overall previously held interests in that business (amended IFRS 3), and when an entity obtains joint control of a business that is a joint operation, it should not remeasure previously held interests in that business (amended IFRS 11).

Definition of a Business (proposed amendments to IFRS 3 under analysis)

The ‘screening test’ proposed in the exposure draft (conclusively determining that a set of activities and assets is not a business if substantially all the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets) should:

  • be made optional on a transaction-by-transaction basis: an entity could on a transaction-by-transaction basis elect to bypass the screening test and assess directly whether a substantive process has been acquired
  • be confirmed as determinative: if an entity has carried out the screening test and concluded that a concentration exists, the transaction should be treated as an asset purchase with no further assessment to change that conclusion; if no concentration exists, the entity then should assess whether it has acquired a substantive process
  • exclude from the gross assets considered (i) deferred tax assets and (ii) goodwill resulting from the effects of deferred tax liabilities
  • be clarified for the following:
    • guidance on 'a single asset' also applies when one of the acquired assets is a right-of-use asset under IFRS 16 Leases (e.g. leasehold land and the building on it are a single asset for the screening test)
    • when assessing whether assets are 'similar', an entity should consider the nature of each single asset and the risks associated with managing and creating outputs from the assets
    • the new guidance on what assets may be considered a single asset or a group of similar assets does not modify the existing guidance in IAS 16, IAS 38 and IFRS 7.


24 May 2017ED/2017/3 - Prepayment Features with Negative Compensation (Proposed amendments to IFRS 9)
31 July 2017ED/2017/2 - Improvements to IFRS 8 Operating Segments (Proposed amendments to IFRS 8 and IAS 34)
2 October 2017DP/2017/1 - Disclosure Initiative—Principles of Disclosure


As in previous years, RSM is again sponsoring the IFRS Foundation Conference in Amsterdam on 29-30 June 2017. Click here to find out more.