EFRAG welcome IASB’s amendments to IFRS9 and IFRS7
Last week the European Financial Reporting Advisory Group (EFRAG) released a draft comment letter in response to the International Accounting Standards Board’s (IASB) exposure draft 2023/2 Amendments to the Classification and Measurement of Financial Instruments.
The IASB’s proposed amendments to IFRS 9 and IFRS 7 introduce changes for financial liability settlement using an electronic payment system and assess the contractual cash flow characteristics of financial assets, including environmental, social, and governance-linked features. The exposure draft also proposes amendments or additions to the disclosure requirements for investments in equity instruments.
EFRAG welcomed the IASB’s efforts to address the concerns of stakeholders and, in general, agrees with the proposed amendments to the classification and measurement of financial instruments. EFRAG particularly highlighted that the proposed clarifications to the general solely payments of principal and interest (‘SPPI’) requirements, noting that they would provide a good basis for evaluating whether contractual cash flows of financial assets with ESG-linked or similar features meet these requirements. EFRAG encourages the IASB to prioritise the publication of these proposed clarifications, allowing entities to apply them as early as possible. The deadline for submitting comments on the ED is 30 June 2023.
Read the letter here.
