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In May 2012, the IFRS Interpretations Committee (Interpretations Committee) discussed a request for guidance on the circumstances in which the restructuring of Greek government bonds should result in derecognition of the whole asset, or only part of it, in accordance with IAS 39 'Financial Instruments: Recognition and Measurement'. The Interpretations Committee tentatively decided not to add any of the issues considered to its agenda.
EFRAG agrees with the Interpretations Committee’s conclusion that the old Greek government bonds should be derecognised in their entirety (since their terms and conditions are substantially different compared to those of the new Greek government bonds). EFRAG therefore supports the Interpretations Committee’s tentative decision not to add the issue to its agenda.
However, EFRAG believes that it would be helpful if the standards explicitly dealt with debt restructurings more generally, which would be particularly relevant in the light of the current financial crisis. In this respect EFRAG notes the absence of certain definitions that are critical for the derecognition assessment process, and the lack of an explicit discussion in IAS 39 of when a modification of a financial asset (or exchange of debt instruments) results in derecognition. Therefore, EFRAG suggests that the Interpretations Committee recommend to the IASB that accounting for debt restructurings and modifications be addressed as part of the finalisation of IFRS 9 'Financial Instruments'.