Financial instruments – Symmetric prepayment options

Financial instruments – Symmetric prepayment options

The IASB has started work on a narrow-scope project on 'make-whole' prepayment options.

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We report on the IASB’s first discussions of its symmetric prepayment options project

Work begins on a possible amendment to IFRS 9

New project launches…

The IASB has started its discussions on the classification under IFRS 9 of financial assets with symmetric ‘make-whole’ prepayment options, having agreed in December 2016 to add a narrow-scope project to its agenda.


“A narrow-scope exception for symmetric prepayment options may be welcomed by preparers but could also impact accounting for other prepayment features.” 


At its January meeting, the Board discussed a possible narrow exception to IFRS 9 that would allow particular financial assets with symmetric make-whole prepayment options to be eligible for measurement at amortised cost or at fair value through other comprehensive income – depending on the business model.

The FICE and macro hedge accounting projects were not discussed during this meeting.

At the same meeting, the staff informed the Board that it should expect sweep issues from the fatal flaw review of IFRS 17 Insurance Contracts to be discussed at the February meeting. As a result, the staff now expect to publish the final insurance contracts standard in May 2017.

For more detail on these discussions, read Issue 36 of our IFRS Newsletter: Financial Instruments.

Next steps for the project

The next steps for the project will be to:

  • finish deliberations on the proposed exception; and
  • publish an exposure draft in April 2017.

The Board aims to issue a final amendment in the fourth quarter of 2017 – i.e. before IFRS 9 becomes effective.

Find out more

Visit our IFRS Newsletters page for the latest discussions on these issues.

And go to our IFRS – Financial instruments hot topics page for more on these and other aspects of financial instruments accounting under IFRS.

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