The amendments will allow users of financial statements to improve their understanding of transfer transactions of financial assets (for example, securitisations), including understanding the possible effects of any risks that may remain with the entity that transferred the assets. The amendments also require additional disclosures, if a disproportionate amount of transfer transactions are undertaken around the end of a reporting period.

The amendments broadly align the relevant disclosure requirements of International Financial Reporting Standards (IFRSs) and US generally accepted accounting principles (GAAP).

The IASB had previously published for public comment proposals to replace the existing derecognition model in IAS 39 Financial Instruments: Recognition and Measurement and the associated disclosure requirements in IFRS 7. However, in response to the feedback received, the IASB decided to retain existing derecognition requirements (to be incorporated into IFRS 9 Financial Instruments) and to finalise improved disclosure requirements. The new requirements are contained in Disclosures—Transfers of Financial Assets (Amendments to IFRS 7).

The IASB and the US Financial Accounting Standards Board (FASB) will conduct additional research and analysis, including a post-implementation review of the FASB’s recently amended requirements, before determining any further work to be undertaken.