# Commission Regulation (EU) 2016/2067 of 22 November 2016 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standard 9 (Text with EEA relevance) (revoked) EU Regulation 2016/2067 · adopted 22 November 2016 Commission Regulation (EU) 2016/2067 of 22 November 2016 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standard 9 (Text with EEA relevance) ## Introductory text Commission Regulation (EU) 2016/2067 of 22 November 2016 amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standard 9 (Text with EEA relevance) (revoked) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## IFRS 9 Financial Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## International Financial Reporting Standard 9 Financial Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## CHAPTER 1 Objective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 1.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## CHAPTER 2 Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 2.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 2.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 2.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 2.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 2.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 2.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 2.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## CHAPTER 3 Recognition and derecognition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.1 INITIAL RECOGNITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.1.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Regular way purchase or sale of financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.1.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2 DERECOGNITION OF FINANCIAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.2 Before evaluating whether, and to what extent, derecognition is appropriate under paragraphs 3.2.3–3.2.9, an entity determines whether those paragraphs should be applied to a part of a financial asset (or a part of a group of similar financial assets) or a financial asset (or a group of similar financial assets) in its entirety, as follows. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.3 An entity shall derecognise a financial asset when, and only when: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.4 An entity transfers a financial asset if, and only if, it either: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.5 When an entity retains the contractual rights to receive the cash flows of a financial asset (the ‘original asset’), but assumes a contractual obligation to pay those cash flows to one or more entities (the ‘eventual recipients’), the entity treats the transaction as a transfer of a financial asset if, and only if, all of the following three conditions are met. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.6 When an entity transfers a financial asset (see paragraph 3.2.4), it shall evaluate the extent to which it retains the risks and rewards of ownership of the financial asset. In this case: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Transfers that qualify for derecognition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.12 On derecognition of a financial asset in its entirety, the difference between: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.13 If the transferred asset is part of a larger financial asset (eg when an entity transfers interest cash flows that are part of a debt instrument, see paragraph 3.2.2(a)) and the part transferred qualifies for derecognition in its entirety, the previous carrying amount of the larger financial asset shall be allocated between the part that continues to be recognised and the part that is derecognised, on the basis of the relative fair values of those parts on the date of the transfer. For this purpose, a retained servicing asset shall be treated as a part that continues to be recognised. The difference between: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Transfers that do not qualify for derecognition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Continuing involvement in transferred assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.16 If an entity neither transfers nor retains substantially all the risks and rewards of ownership of a transferred asset, and retains control of the transferred asset, the entity continues to recognise the transferred asset to the extent of its continuing involvement. The extent of the entity's continuing involvement in the transferred asset is the extent to which it is exposed to changes in the value of the transferred asset. For example: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.17 When an entity continues to recognise an asset to the extent of its continuing involvement, the entity also recognises an associated liability. Despite the other measurement requirements in this Standard, the transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the entity has retained. The associated liability is measured in such a way that the net carrying amount of the transferred asset and the associated liability is: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.20 If an entity's continuing involvement is in only a part of a financial asset (eg when an entity retains an option to repurchase part of a transferred asset, or retains a residual interest that does not result in the retention of substantially all the risks and rewards of ownership and the entity retains control), the entity allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. For this purpose, the requirements of paragraph 3.2.14 apply. The difference between: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## All transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.2.23 If a transferor provides non-cash collateral (such as debt or equity instruments) to the transferee, the accounting for the collateral by the transferor and the transferee depends on whether the transferee has the right to sell or repledge the collateral and on whether the transferor has defaulted. The transferor and transferee shall account for the collateral as follows: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.3 DERECOGNITION OF FINANCIAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.3.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.3.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.3.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 3.3.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## CHAPTER 4 Classification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.1 CLASSIFICATION OF FINANCIAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.1.1 Unless paragraph 4.1.5 applies, an entity shall classify financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of both: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.1.2 A financial asset shall be measured at amortised cost if both of the following conditions are met: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.1.2 A A financial asset shall be measured at fair value through other comprehensive income if both of the following conditions are met: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.1.3 For the purpose of applying paragraphs 4.1.2(b) and 4.1.2 A(b): . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.1.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Option to designate a financial asset at fair value through profit or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.1.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.2 CLASSIFICATION OF FINANCIAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.2.1 An entity shall classify all financial liabilities as subsequently measured at amortised cost, except for: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Option to designate a financial liability at fair value through profit or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.2.2 An entity may, at initial recognition, irrevocably designate a financial liability as measured at fair value through profit or loss when permitted by paragraph 4.3.5, or when doing so results in more relevant information, because either: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.3 EMBEDDED DERIVATIVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.3.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Hybrid contracts with financial asset hosts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.3.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Other hybrid contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.3.3 If a hybrid contract contains a host that is not an asset within the scope of this Standard, an embedded derivative shall be separated from the host and accounted for as a derivative under this Standard if, and only if: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.3.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.3.5 Despite paragraphs 4.3.3 and 4.3.4, if a contract contains one or more embedded derivatives and the host is not an asset within the scope of this Standard, an entity may designate the entire hybrid contract as at fair value through profit or loss unless: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.3.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.3.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.4 RECLASSIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.4.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.4.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 4.4.3 The following changes in circumstances are not reclassifications for the purposes of paragraphs 4.4.1–4.4.2: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## CHAPTER 5 Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.1 INITIAL MEASUREMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.1.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.1.1 A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.1.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.1.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.2 SUBSEQUENT MEASUREMENT OF FINANCIAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.2.1 After initial recognition, an entity shall measure a financial asset in accordance with paragraphs 4.1.1–4.1.5 at: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.2.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.2.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.3 SUBSEQUENT MEASUREMENT OF FINANCIAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.3.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.3.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.4 AMORTISED COST MEASUREMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Effective interest method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.4.1 Interest revenue shall be calculated by using the effective interest method (see Appendix A and paragraphs B5.4.1–B5.4.7). This shall be calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.4.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Modification of contractual cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.4.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Write-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.4.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5 IMPAIRMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Recognition of expected credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## General approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Determining significant increases in credit risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Modified financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.12 If the contractual cash flows on a financial asset have been renegotiated or modified and the financial asset was not derecognised, an entity shall assess whether there has been a significant increase in the credit risk of the financial instrument in accordance with paragraph 5.5.3 by comparing: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Purchased or originated credit-impaired financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Simplified approach for trade receivables, contract assets and lease receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.15 Despite paragraphs 5.5.3 and 5.5.5, an entity shall always measure the loss allowance at an amount equal to lifetime expected credit losses for: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Measurement of expected credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.17 An entity shall measure expected credit losses of a financial instrument in a way that reflects: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.5.20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.6 RECLASSIFICATION OF FINANCIAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.6.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.6.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.6.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.6.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.6.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.6.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.6.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.7 GAINS AND LOSSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.7.1 A gain or loss on a financial asset or financial liability that is measured at fair value shall be recognised in profit or loss unless: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.7.1 A Dividends are recognised in profit or loss only when: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.7.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.7.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.7.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Investments in equity instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.7.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.7.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Liabilities designated as at fair value through profit or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.7.7 An entity shall present a gain or loss on a financial liability that is designated as at fair value through profit or loss in accordance with paragraph 4.2.2 or paragraph 4.3.5 as follows: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.7.8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.7.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Assets measured at fair value through other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.7.10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 5.7.11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## CHAPTER 6 Hedge accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.1 OBJECTIVE AND SCOPE OF HEDGE ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.1.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.1.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.1.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.2 HEDGING INSTRUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Qualifying instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.2.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.2.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.2.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Designation of hedging instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.2.4 A qualifying instrument must be designated in its entirety as a hedging instrument. The only exceptions permitted are: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.2.5 An entity may view in combination, and jointly designate as the hedging instrument, any combination of the following (including those circumstances in which the risk or risks arising from some hedging instruments offset those arising from others): . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.2.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.3 HEDGED ITEMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Qualifying items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.3.1 A hedged item can be a recognised asset or liability, an unrecognised firm commitment, a forecast transaction or a net investment in a foreign operation. The hedged item can be: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.3.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.3.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.3.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.3.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.3.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Designation of hedged items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.3.7 An entity may designate an item in its entirety or a component of an item as the hedged item in a hedging relationship. An entire item comprises all changes in the cash flows or fair value of an item. A component comprises less than the entire fair value change or cash flow variability of an item. In that case, an entity may designate only the following types of components (including combinations) as hedged items: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.4 QUALIFYING CRITERIA FOR HEDGE ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.4.1 A hedging relationship qualifies for hedge accounting only if all of the following criteria are met: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5 ACCOUNTING FOR QUALIFYING HEDGING RELATIONSHIPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5.2 There are three types of hedging relationships: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5.6 An entity shall discontinue hedge accounting prospectively only when the hedging relationship (or a part of a hedging relationship) ceases to meet the qualifying criteria (after taking into account any rebalancing of the hedging relationship, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised. For this purpose, the replacement or rollover of a hedging instrument into another hedging instrument is not an expiration or termination if such a replacement or rollover is part of, and consistent with, the entity's documented risk management objective. Additionally, for this purpose there is not an expiration or termination of the hedging instrument if: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5.7 An entity shall apply: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Fair value hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5.8 As long as a fair value hedge meets the qualifying criteria in paragraph 6.4.1, the hedging relationship shall be accounted for as follows: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5.10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5.11 As long as a cash flow hedge meets the qualifying criteria in paragraph 6.4.1, the hedging relationship shall be accounted for as follows: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5.12 When an entity discontinues hedge accounting for a cash flow hedge (see paragraphs 6.5.6 and 6.5.7(b)) it shall account for the amount that has been accumulated in the cash flow hedge reserve in accordance with paragraph 6.5.11(a) as follows: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Hedges of a net investment in a foreign operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5.13 Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted for as part of the net investment (see IAS 21), shall be accounted for similarly to cash flow hedges: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5.14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Accounting for the time value of options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5.15 When an entity separates the intrinsic value and time value of an option contract and designates as the hedging instrument only the change in intrinsic value of the option (see paragraph 6.2.4(a)), it shall account for the time value of the option as follows (see paragraphs B6.5.29–B6.5.33): . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Accounting for the forward element of forward contracts and foreign currency basis spreads of financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.5.16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.6 HEDGES OF A GROUP OF ITEMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Eligibility of a group of items as the hedged item . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.6.1 A group of items (including a group of items that constitute a net position; see paragraphs B6.6.1–B6.6.8) is an eligible hedged item only if: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Designation of a component of a nominal amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.6.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.6.3 A layer component of an overall group of items (for example, a bottom layer) is eligible for hedge accounting only if: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Presentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.6.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.6.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Nil net positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.6.6 When the hedged item is a group that is a nil net position (ie the hedged items among themselves fully offset the risk that is managed on a group basis), an entity is permitted to designate it in a hedging relationship that does not include a hedging instrument, provided that: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.7 OPTION TO DESIGNATE A CREDIT EXPOSURE AS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Eligibility of credit exposures for designation at fair value through profit or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.7.1 If an entity uses a credit derivative that is measured at fair value through profit or loss to manage the credit risk of all, or a part of, a financial instrument (credit exposure) it may designate that financial instrument to the extent that it is so managed (ie all or a proportion of it) as measured at fair value through profit or loss if: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Accounting for credit exposures designated at fair value through profit or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.7.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.7.3 An entity shall discontinue measuring the financial instrument that gave rise to the credit risk, or a proportion of that financial instrument, at fair value through profit or loss if: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 6.7.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## CHAPTER 7 Effective date and transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.1 EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.1.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.1.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.1.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.1.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2 TRANSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Transition for classification and measurement (Chapters 4 and 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.8 At the date of initial application an entity may designate: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.9 At the date of initial application an entity: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.10 At the date of initial application, an entity: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.11 If it is impracticable (as defined in IAS 8) for an entity to apply retrospectively the effective interest method, the entity shall treat: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Impairment (Section 5.5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.19 When determining whether there has been a significant increase in credit risk since initial recognition, an entity may apply: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Transition for hedge accounting (Chapter 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.25 On initial application of the hedge accounting requirements of this Standard, an entity: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.26 As an exception to prospective application of the hedge accounting requirements of this Standard, an entity: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Entities that have applied IFRS 9 (2009), IFRS 9 (2010) or IFRS 9 (2013) early . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.2.28 An entity that applied IFRS 9 (2009), IFRS 9 (2010) or IFRS 9 (2013) and subsequently applies this Standard: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.3 WITHDRAWAL OF IFRIC 9, IFRS 9 (2009), IFRS 9 (2010) AND IFRS 9 (2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.3.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## 7.3.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ## Appendix A Defined terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --- Source: https://www.legislation.gov.uk/eur/2016/2067 (the official version) Page: https://openlegislation.uk/eu-regulation-2016-2067 Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.