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03/08/2015 - EFRAG has published a feedback report on the results of the pre-endorsement questionnaire on IFRS 9

EFRAG has published a feedback report on the results of the pre-endorsement questionnaire on IFRS 9. The input was used by EFRAG in developing its (draft) endorsement advice for the European Commission on IFRS 9 Financial Instruments.

EFRAG and the partner National Standard Setters (ANC, ASCG, FRC and the OIC) carried out a follow-up questionnaire on IFRS 9 Financial Instruments. The purpose of this questionnaire was to identify to what extent the concerns raised by constituents in earlier field-tests were still applicable after the publication of the final IFRS 9 in July 2014. Twenty-four companies participated in the questionnaire.

A majority of the participants had prepared a qualitative analysis of the classifcation requirements in IFRS 9. Quantitative impacts were mostly not available yet. A majority of participants from all industries expected most financial assets currently classified as loans and receivables, held to maturity and available for sale under IAS 39 to meet the SPPI-test. Participants were divided on the implications for lending practices. The participants from the insurance industry called for a deferral of IFRS 9 for their industry.

Participants were divided whether the issues identified during field-tests in 2012 and 2013 regarding impairment were resolved; although more participants thought they were resolved than those who thought they were not resolved. Also, a few participants were able to provide results of their initial quantitative modelling of the effect on IFRS 9 on loss allowances.

On general hedge accounting some remaining issues were mentioned as unresolved by individual participants.

Overall, IFRS 9 was recommended by some participants of the banking industry for endorsement, some even recommended early endorsement. No participant recommended not endorsing IFRS 9.

EFRAG would like to thank the participants to the follow-up questionnaire in providing their input.

The feedback report can be found below.