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23 April 2018

IASB/Sue Lloyd: IFRS 9 and equity investments


Sue Lloyd, Vice-Chair of the IASB, discusses IFRS 9 and explains the IASB’s thinking behind the requirements for equity instruments in the Standard.

This is the first year that companies around the world are using the new financial instruments accounting Standard, IFRS 9 Financial Instruments. IFRS 9 was the main response of the IASB to the global financial crisis, and it introduces many enhancements to financial instruments accounting.

Accounting for financial instruments has always generated a lot of controversy and IFRS 9 is no exception. One of the areas of concern to some stakeholders is how the new requirements for equity investments can impact long-term investment. The EC has asked the EFRAG to conduct further research on this topic and, as a result, EFRAG has recently published a Discussion Paper that is currently open for consultation.

it might be useful to reflect back on the IASB’s reasoning when it developed the new requirements for equity investments. In this paper, Ms Lloyd summarises the IASB´s decisions taken in following areas:

  • IFRS 9 on long-term investment.
  • Reporting value changes in profit or loss gives better information about value creation over time.
  • Recycling can provide a confusing presentation of performance.
  • Debt investments are different.
  • Prohibiting recycling avoids complexity related to impairment.
  • Developing a new impairment model for equity investments is not an easy task.
  • Prevalence of available for sale equity investments applying IAS 39.

Full paper



© IASB - International Accounting Standards Board


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