The International Accounting Standards Board is giving companies two additional years to apply some new rules for financial instruments to allow more time for all areas of financial instrument accounting to be updated and applied at once.

The IASB delayed the mandatory effective date of International Financial Reporting Standard 9: Financial Instruments from Jan. 1, 2013, to Jan. 1, 2015. IFRS 9 was published in November 2009 specifying new requirements for how companies would classify and measure financial assets.

The board added more requirements for financial liabilities in October 2010, with most of those carried forward from International Accounting Standard No. 39. Changes focused on the fair value option for financial liabilities to address concerns about how the accounting plays out when a company's own credit risk rises, eroding the value of its liabilities.

The deferred effective date for IFRS 9 will allow IASB to continue to work with the Financial Accounting Standards Board to try to put all new requirements for financial instruments into effect at the same time. It also gives the boards more time to converge the rules under IFRS and U.S. Generally Accepted Accounting Principles so that companies reporting under either rule book will follow common approaches, leading to more comparable results.

The boards continue to hammer away at differences in impairment and hedge accounting, although they have made significant progress recently in coming to terms over how to account for impairments. The two boards tentatively agreed they will establish an approach for identifying troubled financial assets in a way that would alert investors sooner to the potential for losses. The approach would require companies to identify assets where losses are anticipated as far as 12 months in advance.

FASB and IASB originally targeted mid-2011 to finalize new rules for financial instruments, leases, and revenue recognition, but found that target impossible to meet given the complexity of the standards and the significant feedback on their initial proposals. The boards have developed mostly converged solutions for leases and revenue recognition, but followed different approaches for financial instruments and are still trying to resolve differences.