IFRS Foundation releases IFRS 9 expected credit losses ‘educational materials’ and considers changed timetables for international financial reporting standards including IFRS 17 Insurance Contracts
The IFRS Foundation has released a document responding to questions regarding the application of IFRS 9 Financial Instruments during the current period of enhanced economic uncertainty arising from the covid-19 pandemic.
At the same time, the Foundation has said that, despite the challenges arising from the covid-19 pandemic, the International Accounting Standards Board (IASB) and its technical staff will continue to advance time-sensitive projects, such as the projects on IBOR reform and amendments to IFRS 17 Insurance Contracts, in accordance with the original project plans.
However, the Foundation also said that it recognises the importance of giving stakeholders enough time to respond effectively to its work. As a result, the IASB will discuss specific measures during its April meeting.
In addition, it will postpone to May 2020 the publication of several narrow-scope amendments to IFRS standards originally planned for March and April 2020. This consolidation of publications is intended to facilitate more efficient post-publication procedures by its stakeholders.
IFRS 9 Financial Instruments
The IFSR 9 document (IFRS 9 and covid-19: accounting for expected credit losses), prepared for educational purposes, highlights requirements within the standard that are relevant for companies considering how the pandemic affects their accounting for expected credit losses (ECL).
It does not change, remove nor add to, the requirements in IFRS 9 Financial Instruments. It is intended to support the consistent and robust application of IFRS 9.
The IFRS Foundation said that it and the IASB continue to work in close cooperation with regulators and others regarding the application of IFRS 9, and the document encourages companies to consider guidance provided by prudential and securities regulators.
IFRS 17 Insurance Contracts
At its March meeting, the IASB tentatively decided to confirm most of the proposals in the Exposure Draft Amendments to IFRS 17 issued in June 2019, with some changes to address feedback on those proposals.
The IASB expects to issue the amendments to IFRS 17 in the second quarter of 2020.
The IASB also tentatively decided that IFRS 17 incorporating the amendments will be effective from 1 January 2023. It also tentatively decided to extend the fixed expiry date of the exemption for some insurers from applying IFRS 9 to 1 January 2023.
IFRS 16 Leases: UK delays NHS implementation
In light of covid-19 pressures, the Treasury and the Financial Reporting Advisory Board (FRAB) have decided that IFRS 16 implementation in the public sector will be deferred for a further year, to 2021/22. The documents and guidance will be updated in due course on its websites.
The Foundation is replacing regular meetings with virtual meetings where possible. Digital access to public meetings will be provided as usual for those who wish to participate in or observe meetings remotely.