21 October 2011

EBA commented on the IASB's ED Mandatory Effective Date of IFRS 9

The EBA welcomes the decision of the IASB to delay the mandatory effective date of IFRS 9 to 1 January, 2015, mainly because important phases of IFRS 9 have not been completed within the originally foreseen timeframe. However, considering the relevance of the project on IAS 39 and the need for sufficient implementation time, the entire project should be completed as soon as possible to allow financial institutions and other entities to apply all phases of IFRS 9 in January 2015.

At the same time, while expecting the IASB to deliver as soon as possible, the EBA urges the Board not to compromise on the quality of the final standard, and, if necessary, to review its resource allocation and priorities to meet both targets (quality and timing).

Obviously, in the EU, the mandatory effective date will depend on the actual endorsement of a standard by the European Commission. As such, any final decision of the IASB will have to be considered against that background.

In the comment letter the EBA provided in January 2011 in response to the ‘Request for Views on Effective Dates and Transition Methods’, it was stressed that the same application date should, as much as possible, be applied for a number of standards. In particular the standards IFRS 9 and insurance contracts should have the same effective date, in order to limit accounting mismatches between insurance assets and liabilities. As neither IFRS 9 nor the insurance contracts standard are expected to be completed in time to allow an application date in 2013, a delay of both effective dates is strongly recommended.

The question of the requirements in IFRS 9 for comparatives for entities which would apply IFRS 9 before January 2012 does not apply at an EU level, as IFRS 9 has not yet been endorsed by the EU.

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