SPPI Test Tool
The Solely Payments of Principal and Interest (SPPI) test determines whether a financial asset qualifies for amortised cost or FVOCI measurement under IFRS 9.
This tool guides you through the contractual cash flow characteristics assessment defined in paragraphs B4.1.7–B4.1.26 of IFRS 9, including modified time value of money features, leverage, and prepayment/extension options.
Does the instrument contain a leverage feature on the interest rate?
A leverage feature exists when interest is calculated as a multiple of a benchmark rate (e.g., 2× EURIBOR) or any mechanism that amplifies exposure to rate movements in a non-linear way — including inverse floaters and similar structures.
How it works
Answer four or five yes/no questions about your instrument's contractual terms — leverage features, equity conversion rights, prepayment options, and interest rate structure. A fifth question on prepayment compensation appears only if a prepayment or extension option is present.
The tool follows the decision tree in IFRS 9 §B4.1.7–B4.1.26, identifies any disqualifying features, and delivers a PASS or FAIL conclusion with the exact paragraph reference and applicable measurement category.