Proposed amendments to IFRS 9 and IFRS 7 on the SPPI test for debt assets: disclosure and first-time application

At its September 2022 meeting, the IASB tentatively decided to amend IFRS 9 to clarify the application of the SPPI test to debt assets.

Keywords: Mazars, Thailand, IFRS, IASB, IFRS 9, IFRS 7, SPPI test

22 December 2022

At its October meeting, the IASB returned to this topic and tentatively decided:

  • to amend IFRS 7 by adding a requirement to disclose for each class of financial assets and financial liabilities not measured at fair value:
    • a description of contractual terms – such as the nature of any contingent events – that could change the timing or amount of future cash flows;
    • quantitative information about the range of changes to contractual cash flows that could result from these contractual terms;
    • the gross carrying amount of financial assets and amortised cost of financial liabilities subject to these contractual terms;
  • to clarify the arrangements for the first application of these amendments to the SPPI test, as follows:
    • retrospective application, in accordance with IAS 8, except that the entity would not be required to restate comparative information;
    • an obligation for the entity, when changing the measurement category of a financial asset, to disclose the previous and the new categories, as well as the respective gross carrying amounts in each category;
    • an effective date of these amendments which is not yet known, and will be determined after the publication of the exposure draft, with early application permitted