|
|
EFRAG has issued its draft comment letter on the Exposure Draft of the proposed amendments to IFRIC 9 and IAS 39 'Embedded Derivatives'. EFRAG suggests some changes to the proposed amendments.
EFRAG agrees with the conclusions reached in the ED that:
Ø an entity shall assess whether an embedded derivative is required to be separated from a host contract when the entity reclassifies a hybrid (combined) financial asset out of the fair value through profit or loss category;
Ø the assessment is made on the basis of the circumstances that existed when the entity first became a party to the contract; and
Ø if an entity is unable to separate a non-closely related embedded derivative from the host contract, the entire hybrid financial instrument must not be reclassified out of the fair value though profit and loss category.
Deadline for comments is