06-09-2011, 12:48 AM
Paragraphs 10-57 of IAS 39 are deleted as well and as part of IFRS improvement project (phase 1 for IAS 39) the deleted portion of IAS 39 is now in the 'refined' form of IFRS 9. Rest of the portion of IAS 39 will be transferred as part of phase 2 and phase 3.
As you know, overall direction of improvement projects is towards 'fair value' approach (specifically for financial instruments), accordingly the overall tone of both IFRS 9 and IFRS 7 is to measure (except those carried at amortized cost) and disclose all financial assets at fair value. Therefore, the para of old IAS 39 and previous IFRS 7 (29 b) which stated exception for determination of fair value of private equity investments (usually classified as held for sale) is now deleted. Both IFRSs then discuss different valuation techniques that an entity should use to measure fair value (both for measurement and disclosure) even if the fair value is not directly observable from market (e.g in the case of investment in private company's equity-the earlier exception).
As you know, overall direction of improvement projects is towards 'fair value' approach (specifically for financial instruments), accordingly the overall tone of both IFRS 9 and IFRS 7 is to measure (except those carried at amortized cost) and disclose all financial assets at fair value. Therefore, the para of old IAS 39 and previous IFRS 7 (29 b) which stated exception for determination of fair value of private equity investments (usually classified as held for sale) is now deleted. Both IFRSs then discuss different valuation techniques that an entity should use to measure fair value (both for measurement and disclosure) even if the fair value is not directly observable from market (e.g in the case of investment in private company's equity-the earlier exception).
