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Both associations believe that delays in finalising the financial instruments standard and the insurance contracts project (IFRS 4 Phase II) make it necessary to delay the date. However, they disagree with the IASB on setting a new date, as too much uncertainty still surrounds the finalisation of both projects, which should become mandatory simultaneously.
Given the relationship between assets and liabilities in insurance entities, as recognised in the Basis for Conclusions, it is important that entities writing insurance contracts should not be required to adopt IFRS 9 until the same date as the mandatory adoption date of IFRS 4 Phase II. Without such a proviso, insurers would be required to have to undergo two separate significant conversion exercises within a few years of each other. They also believe it is premature to set an effective date for IFRS 9 before completing the Insurance Contracts Project, as the decisions taken in that project on the use of Other Comprehensive Income have a critical interaction with IFRS 9.
IFRS 9 includes several exceptions to full retrospective application (including but not limited to the definition of the business model and designation of assets at initial application), and transition arrangements will be needed for hedge accounting given the inability to apply it retrospectively. The CEA and the CFO Forum do not believe that comparative information will result in useful information for users in all circumstances.
Finally, they note that requiring restated comparative information is also impacted by the mandatory effective date and is compounded for entities in jurisdictions which have longer comparative reporting periods, for example, those entities in France and for SEC filers. If comparative information is required for IFRS 9, the 2015 effective date is therefore already likely to be impractical for such entities, given the underlying standards have yet to be finalised.