[2] The boards disagreed on several important issues, and also took different approaches to developing the new financial instruments standard.
[5][6] In 2010, IASB issued another portion of IFRS 9, primarily covering classification and measurement of financial liabilities and also addressing aspects of applying fair value option and bifurcating embedded derivatives.
[3] In addition to creating significant divergence with FASB, the lack of a FVOCI category would have been inconsistent with the accounting model being developed by the IASB for insurance contracts.
[9] To address these concerns, IASB issued an exposure draft in 2012 proposing limited amendments to the classification and measurement of financial instruments.
[11] IASB was also developing its hedge accounting model independently of FASB, and issued that portion of the IFRS 9 standard in 2013.
[12] The final IFRS 9 standard, including hedge accounting, impairment, and the amended classification and measurement guidance, was issued on 24 July 2014.
[10] If the asset passes the contractual cash flows test, the business model assessment determines how the instrument is classified.
If the instrument is being held to collect contractual cash flows, i.e., it is not expected to be sold, it is classified as amortized cost.
[10] If the business model for the instrument is to both collect contractual cash flows and potentially sell the asset, it is reported at FVOCI.
[10] For those liabilities, the change in fair value related to the entity's own credit standing is reported in other comprehensive income rather than profit and loss.
[10] IFRS 9 retained the concept of fair value option from IAS 39, but revised the criteria for financial assets.
[15] The allowance will continue to be based on the expected losses from defaults on the receivables recognised at the balance sheet date in the next 12 months following, unless there is a significant increase in credit risk ("SICR").