The following instruments in IFRS 9 have be carefully judged by the IASB and fail(ed) the Solely Payment of Principal and Interest test.
An inverse floating interest rate loan – e.g. the interest rate on the loan increases if an interest rate index decreases.
The SPPI test is not met because interest has an inverse relationship to market rates and so does not represent consideration for the time value of money and credit risk.
A perpetual instrument that is callable at any time by the issuer at par plus accrued interest, but for which interest is only payable if the issuer remains solvent after payment and any deferred interest does not accrue additional interest.
The SPPI test is not met because the issuer may defer payments and additional interest does not accrue on the amounts deferred. As a result, the holder is not entitled to consideration for the time value of money and credit risk. However, the fact that an instrument is perpetual does not preclude it from meeting the SPPI test.