Amendments to the Classification and Measurement of Financial Instruments

Amendments to IFRS 9 and IFRS 7 – Amendments to the Classification and Measurement of Financial Instruments (the Amendments) were approved for adoption by 11 members of the UK Endorsement Board on 15 April 2025.

A link to the Adoption Statement of the Amendments and the text of the Amendments can be found here.

The Amendments are not likely to lead to a significant change in accounting practice and do not meet the criteria for a post-implementation review under Regulation 11 in SI 2019/685.

Timeline

On 30 May 2024 the International Accounting Standards Board (IASB) published Amendments to IFRS 9 and IFRS 7 – Amendments to the Classification and Measurement of Financial Instruments. The Amendments will be effective for annual reporting periods beginning on or after 1 January 2026, with earlier application permitted.

Background

The Amendments are a response to feedback received by the IASB in relation to:

• The potential effect on financial liabilities from a Tentative Agenda Decision made by the IFRS Interpretations Committee regarding the treatment of cash received by electronic transfer as settlement for a financial asset.
• The Post-implementation Review of IFRS 9 – Classification and Measurement (PIR). The UKEB’s response to the PIR was submitted in January 2022. Further details on the UKEB’s influencing project on the PIR can be found on the project webpage.

In March 2023 the IASB published the exposure draft (ED) Amendments to the Classification and Measurement of Financial Instruments. The UKEB’s response to the ED was submitted in July 2023. Further details on the UKEB’s influencing project on this ED can be found on the project webpage.

Main requirements in the Amendments to the Classification and Measurement of Financial Instruments

The Amendments provide further clarification and requirements for:

• The recognition and derecognition criteria for financial assets and liabilities.
• The classification requirements for financial assets, particularly those containing contingent features (such as ESG-linked targets), non-recourse features or contractually linked instruments.
• Disclosures related to the amendments to the classification requirements, and also for investments in equity instruments designated at fair value through other comprehensive income.

UKEB Outreach

The UKEB outreach plan included discussions with stakeholders and public consultation on the UKEB’s Draft Endorsement Assessment Criteria (DECA).

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UKEB Endorsement Criteria Assessment

On 26 September 2024, the UKEB published its draft Endorsement Criteria Assessment of the Amendments to IFRS 9 and IFRS 7 – Amendments to the Classification and Measurement of Financial Instruments.

The public consultation period closed on 10 January 2025. Thank you to all stakeholders that provided feedback.

All responses received were considered when finalising the Endorsement Criteria Assessment (ECA). The final ECA was published on 17 April 2025. An accompanying Feedback Statement, describing how feedback received from stakeholders was addressed, was also published on the same date.

The relevant documents are available at the foot of this page:

• Project Initiation Plan
• DECA and Invitation to Comment
• Response from stakeholders
• Final ECA
• Feedback Statement
• Due Process Compliance Statement (DPCS) (will be available after UKEB’s May 2025 Board meeting)

UKEB meetings

Meeting(s) related to the endorsement of the Amendments are as follows:

• 28 March 2025: Adoption Package 
• 27 February 2025: Summary of feedback received on Draft Endorsement Criteria Assessment 
• 19 September 2024: Draft Endorsement Criteria Assessment  
• 28 June 2024: Project Initiation Plan
• 28 March 2024: IASB General Update   
• 23 February 2024: IASB General Update  
• 14 December 2023: IASB General Update 
• 16 November 2023: IASB General Update    
• 19 October 2023: IASB General Update