IFRIC 9 - Reassessment of Embedded Derivatives

The Interpretation clarifies that an entity shall assess whether an embedded derivative is required to be separated from the host contract and accounted for as a derivative when the entity first becomes a party to the contract. Subsequent reassessment is prohibited unless there is a change in the terms of the contract that significantly modifies the cash flows that otherwise would be required under the contract, in which case reassessment is required.

EFRAG issued its comment letter in response to the Exposure Draft in June 2005 and submitted its endorsement advice to the European Commission in April 2006.