CFM21410 - Accounting for corporate finance: classification and measurement: accounting policy overview

The following summarises the accounting policy requirements and choices available for the classification and measurement of financial instruments that are available to companies applying the different accounting frameworks outlined at CFM20010 . Also included are links to the sections covering the classification and measurement requirements under each of the policy requirements and choices.

The key concepts and presentational requirements are similar across the different accounting frameworks as outlined at CFM21000+ and CFM21200+.

IFRS & FRS 101 users

For those entities that are mandated to use IFRS, have voluntarily adopted IFRS or have adopted FRS 101 the following accounting standards are relevant for the classification and measurement of financial instruments:

  • For accounting periods beginning before 1 January 2018 - IAS 39 (‘Financial instruments: recognition and measurement’) the version prior to the amendments made for IFRS 9 (CFM21500+);
  • For accounting periods beginning on or after 1 January 2018 - IFRS 9 (‘Financial instruments’) and, potentially, for hedge accounting requirements only, IAS 39 as amended for IFRS 9. (CFM21800+).

FRS 102 users

Those companies that use FRS 102 have an accounting policy choice for which accounting standard to apply for the classification and measurement of financial instruments. The available choices are as follows:

  • Sections 11 and 12 of FRS 102 (CFM23000+);
  • IAS 39 (‘Financial Instruments: recognition and measurement’) the version prior to the amendments for IFRS 9 (CFM21500+); or
  • IFRS 9 (‘Financial Instruments’) (CFM21800+).

FRS 105 users

FRS 105 users have to apply the classification and measurement requirements of Section 9 of FRS 105 (CFM23092+).

Old UK GAAP

Old UK GAAP has now been withdrawn for all companies. For the classification and measurement of financial instruments under Old UK GAAP a company applied one of the following (CFM20035):

  • FRS 26 (Financial Instruments: recognition and measurement). The classification and measurement requirements are aligned with IAS 39 (CFM21500+); or
  • FRS 4 (‘Capital Instruments’), SSAP 20 (‘Foreign Currency Translation’), FRS 5 (‘Reporting the Substance of Transactions’) and FRS 18 (‘Accounting Policies’) (CFM22000+).

Where a company had listed debt or equity, or where the company adopted fair value accounting, it was obliged to apply FRS 26.