IFRS 9 - derecognition of loan
IFRS 9 - derecognition of loan
What are the requirements to derecognize the loan? We are in process of negotiating completely new loan agreement with the new terms with the same bank (but it is a syndicate loan) but the amount borrowed is not substantially different than the amount that is due to the bank from us currently.
Re: IFRS 9 - derecognition of loan
so substantial means 10% test? But there is additional guidance: It should be noted that IFRS 9 does not prohibit derecognition of the original financial liability and the recognition of a new financial liability if the 10% test is failed. Some entities do that when the terms of a liability are modified substantially, e.g. a liability is denominated in a different currency after the modification.
So is it possible to derecognize it even though it doesn't meet 10% test?
So is it possible to derecognize it even though it doesn't meet 10% test?
Re: IFRS 9 - derecognition of loan
yes, substantial means 10% test
re. this guidance on voluntary' derecognition, I now think I must change it (can't remember my thinking when I wrote this), because under IFRS 9.3.3.1: An entity shall remove a financial liability from its statement of financial position when, and only when, it is extinguished [...]
would you prefer to derecognise your liability? why?
re. this guidance on voluntary' derecognition, I now think I must change it (can't remember my thinking when I wrote this), because under IFRS 9.3.3.1: An entity shall remove a financial liability from its statement of financial position when, and only when, it is extinguished [...]
would you prefer to derecognise your liability? why?
Re: IFRS 9 - derecognition of loan
well, I would prefer not to derecognize it, but I thought it's easier to defend derecognition if there is a new agreement/new terms rather than modification.