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IFRS newsletter - November 2010


Welcome to this edition of the IFRS Newsletter of Deloitte Luxembourg.

In this issue:

IFRS 9: Financial Instruments (replacement of IAS 39)

On 12 November 2009, the IASB issued IFRS 9 Financial Instruments as the first step in its project to replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 introduces new requirements for classifying and measuring financial assets that must be applied starting 1 January 2013, with early adoption permitted.

On 28 October 2010, the IASB issued requirements on the accounting for financial liabilities. These requirements will be added to IFRS 9 Financial Instruments and complete the classification and measurement phase of the IASB's project to replace IAS 39. The new requirements address the problem of volatility in profit or loss arising from an issuer choosing to measure its own debt at fair value. This is often referred to as the 'own credit' problem.

The IASB intends to expand IFRS 9 during 2010 and 2011 to add new requirements for derecognition of financial instruments, impairment, and hedge accounting and aims to replace all of the requirements of IAS 39 by the second quarter of 2011.

The IASB will also address offsetting of financial assets and liabilities. The boards have decided to jointly issue a separate exposure draft proposing changes to address differences in their standards on balance sheet netting of derivative contracts and other financial instruments that can result in material differences in financial reporting by financial institutions.

This article in this newsletter will also present some of the main recent updates on the IAS 39 replacement project, especially regarding Phase II: Impairment methodology.

For additional information on these topics and on services we could provide to your entity, contact us at Deloitte has a range of tools and publications to assist in implementing and reporting under IFRS.



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