Why the amendments were made
After its post-implementation review of IFRS 9, the IASB issued Amendments to the Classification and Measurement of Financial Instruments in May 2024. They apply to annual reporting periods beginning on or after 1 January 2026, with early application permitted.
Settlement through electronic payment systems
A financial liability is normally derecognised on the settlement date. The amendments allow an accounting policy choice to derecognise a liability settled through an electronic payment system before the settlement date, if specified criteria are met (for example, the payment instruction cannot be withdrawn and settlement risk is insignificant).
ESG-linked and other contingent features
Many loans now carry interest adjustments linked to sustainability targets. The amendments clarify how to assess whether such contractual cash flows are solely payments of principal and interest (SPPI), focusing on whether the contingent event is consistent with a basic lending arrangement.
Non-recourse and contractually linked instruments
The amendments also clarify the characteristics of financial assets with non-recourse features and of contractually linked instruments, which affects how some structured and asset-backed investments are classified.
New disclosures
- Contractual terms that could change the timing or amount of cash flows on the occurrence of a contingent event
- Additional detail on equity investments designated at fair value through other comprehensive income
What to do now
- Review loan agreements with sustainability-linked or other contingent features
- Decide whether to adopt the electronic payment policy choice and document it consistently
- Update your IFRS 7 disclosure checklist for 2026 year-end reporting
This article is general information, not accounting, tax or legal advice. Rates, thresholds and effective dates should be confirmed with the official sources (IFRS Foundation, tax authorities, regulators) or your adviser before acting.