News type icon

17/01/2018 - EFRAG's report to the European Commission on the assessment of the impact of IFRS 9 on long-term investments in equity instruments

EFRAG issued a letter to the European Commission to report on the findings of the first phase (the assessment phase) of its investigation into the significance of investments in equity instruments and the possible effects on long-term investments of the new requirements in IFRS 9 Financial Instruments.

In May 2017, the European Commission requested EFRAG to investigate the potential effects on long-term investments in equity instruments of the requirements of IFRS 9 Financial Instruments. In the first phase of the project (‘the assessment phase’), EFRAG was asked to collect quantitative data on the current holdings of equity instruments and their accounting treatment and investigate whether, and to what extent, entities expect the new accounting requirements to affect their decisions in relation to investment in equity instruments.

The objective of this letter is to present EFRAG’s findings in relation to the assessment phase of the European Commission’s request. The findings are mostly based on a public consultation with European constituents and a review of a sample of annual financial statements. The letter can be found here.

EFRAG will continue its work in accordance with the request for technical advice from the European Commission and will investigate if and how the accounting requirements in IFRS 9 may be improved.