International Financial Reporting Standards_guide.pdf

Chapter 18 Financial Instruments (IFRS 9) 219
Figure 18.1 Transitional Provisions of IFRS 9
November
2009
January
2011
January
2012
January
2013
Adopt at any time
during the period.
Full retrospective
application.
Adopt for a full
reporting period.*
Prospective
application.
Retrospective
application.
For an annual
reporting period.*
Full retrospective
application.
* Wording per the standard. Unclear what the difference is between a full reporting period and an annual reporting period. A reporting
period could be an interim period.
18.4.11 IFRS 9 is mandatorily applicable for annual periods beginning on or after January
1, 2013 with full retrospective application. If an entity adopts this IFRS before January 1, 2011,
then the application date can be at any time and need not be at the beginning of the reporting
period. However, full retrospective application will be required. If IFRS 9 is adopted for
reporting periods beginning before January 1, 2012, the entity need not restate prior year
numbers. These options are set out in figure 18.1 above.
18.4.12 The following transitional provisions apply:
■ The classification will depend on the facts and circumstances at the date of initial
application.
■ The fair value of a hybrid contract that has not been accounted for as a single contract
in the past shall be the sum of the fair value of the host contract and the fair value of
the derivative. Any differences between the fair value at initial application and the sum
of the fair value of the host and derivative should be recognized in opening retained
earnings.
■ The previous designation at fair value through profit or loss may be revoked if the
financial asset meets the criteria to be measured at amortized cost.
■ If it is impracticable to apply the effective interest rate method retrospectively, then the
fair value of the asset in the comparative periods will be treated as amortized cost of
the asset.
■ Any unquoted equities or derivatives on these equities that were measured at cost in
terms of IAS 39 will be measured at fair value and any difference between cost and fair
value will be recognized in opening retained earnings.
18.5 PRESENTATION AND DISCLOSURE
18.5.1 The current presentation and disclosure requirements in IAS 32 and IFRS 7 are applied
to all financial assets. Details of these requirements are set out in chapters 32 and 33
respectively.