BC3 The Board identified an apparent inconsistency between the guidance in IAS 20 and IAS 39. [IFRS 9 Financial Instruments replaced IAS 39. IFRS 9 applies to all items that were previously within the scope of IAS 39. This paragraph refers to matters relevant when IAS 20 was amended in 2008.] It related to the accounting for loans with a below‑market rate of interest received from a government. IAS 20 stated that no interest should be imputed for such a loan, whereas IAS 39 required all loans to be recognised at fair value, thus requiring interest to be imputed to loans with a below‑market rate of interest.
BC4 The Board decided to remove this inconsistency. It believed that the imputation of interest provides more relevant information to a user of the financial statements. Accordingly the Board amended IAS 20 to require that loans received from a government that have a below‑market rate of interest should be recognised and measured in accordance with IAS 39. The benefit of the g
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