The amendments clarify that on reclassification of a financial asset out of the ‘at fair value through profit or loss’ category all embedded derivatives have to be assessed and, if necessary, separately accounted for in financial statements.
The IASB clarified the accounting treatment of embedded derivatives for entities that make use of the reclassification amendment issued by the IASB in October 2008. The reclassification amendment allows entities to reclassify particular financial instruments out of the ‘at fair value through profit or loss’ category in specific circumstances.
The amendments to IFRIC 9 and IAS clarify that on reclassification of a financial asset out of the ‘at fair value through profit or loss’ category all embedded derivatives have to be assessed and, if necessary, separately accounted for in financial statements.
The amendments apply retrospectively and are required to be applied for annual periods ending on or after 30 June 2009.
Press release
© IASB - International Accounting Standards Board
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