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IASB amendments permit reclassification of financial instruments

13 October 2008


The International Accounting Standards Board (IASB) today issued amendments to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures that would permit the reclassification of some financial instruments.

The amendments to IAS 39 introduce the possibility of reclassifications for companies applying International Financial Reporting Standards (IFRSs), which were already permitted under US generally accepted accounting principles (GAAP) in rare circumstances.

The deterioration of the world’s financial markets that has occurred during the third quarter of this year is a possible example of rare circumstances cited in these IFRS amendments and therefore justifies their immediate publication. Today’s action enables companies reporting according to IFRSs to use the reclassification amendments, if they so wish, from 1 July 2008.

Related documents

  • Read a full, printable version of the press release.

    Download now[PDF]
  • Reclassification of Financial Assets (Amendments to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures)

    Download now [PDF]

These amendments are the latest in a series of steps that the IASB has undertaken to respond to the credit crisis. The IASB has worked with a number of other regional and international bodies, including the Financial Stability Forum (FSF), to address financial reporting issues associated with the credit crisis. In responding to the crisis, the IASB notes the concern expressed by EU leaders and finance ministers through the ECOFIN Council to ensure that ‘European financial institutions are not disadvantaged vis-à-vis their international competitors in terms of accounting rules and of their interpretation.’

The amendments today address the desire to reduce differences between IFRSs and US GAAP in a manner that produces high quality financial information for investors across the global capital markets.


Sir David Tweedie, Chairman of the IASB, said:

In addressing the rare circumstances of the current credit crisis, the IASB is committed to taking urgent action to ensure that transparency and confidence are restored to financial markets. The IASB has acted quickly to address the concerns raised by EU leaders and others regarding the issue of reclassification. Our response is consistent with the request made by European leaders and finance ministers; it is important that these amendments are permitted for use rapidly and without modification.

For more information about the IASB’s response to the credit crisis, please click here.

Reclassification of Financial Assets (Amendments to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures) is available for eIFRS subscribers from today.

Those wishing to subscribe to eIFRSs should visit the  online shop or contact:

IASC Foundation Publications Department,
30 Cannon Street, London EC4M 6XH, United Kingdom.
Tel: +44 (0)20 7332 2730
Fax +44 (0)20 7332 2749


Printed copies (ISBN 978-1-905590-78-0) will be available shortly, at £10.00 plus shipping, from the IASC Foundation Publications Department.

Press enquiries

  • Mark Byatt , Director of Corporate Communications, IASB
    Telephone: +44 (0)20 7246 6472

Technical enquiries

  • Gavin Francis, Director of Capital Markets, IASB
    Telephone: +44 (0)20 7246 6901

Appendix A

The following table illustrates how reclassification will be dealt with following this announcement by IFRSs when compared with US GAAP.




IAS 39 Amendments

Reclassification of securities out of the trading category in rare circumstances



Reclassification to loan category (cost basis) if intention and ability to hold for the foreseeable future (loans) or until maturity (debt securities)



Reclassification if fair value option previously elected

Not permitted

Not permitted