Contrary to widespread belief, IFRS 9 affects more than just financial institutions
International Financial Reporting Standard 9 (IFRS 9) responds to criticisms that International Accounting Standard 39 (IAS 39) is too complex, is inconsistent with the way entities manage their businesses and risks, and defers the recognition of credit losses on loans and receivables until too late in the credit cycle.
The new standard is effective for years beginning on or after January 1, 2018, with earlier adoption permitted. Entities whose predominate activities are insurance-related can delay implementation until 2021.
The International Accounting Standards Board developed IFRS 9 in three phases, dealing separately with the classification and measurement of financial assets, impairment and hedging.
- Chris Wood, Partner, Accounting Advisory Services, Toronto
Ultimately, the question of how an entity is affected by IFRS 9 is that “it depends.” Some entities may find that classification and measurement of their financial assets will be substantially the same as they are currently under IAS 39 and that their impairment allowances may not be affected materially. Others will change substantially.
We can help you re-evaluate your accounting policies, financial statement note disclosures and other areas affected by the new requirements. We can also help you identify changes to your accounting systems and internal controls.
IFRS 9, the new financial instruments standard, is here. And the timing of its 2018 mandatory application date is opportune.
The IASB has issued a narrow-scope amendment to IFRS 9 to enable companies to measure at amortised cost some prepayable financial assets with negative compensation. The assets affected, that include some loans and debt securities, would otherwise have been measured at fair value through profit or loss (FVTPL).
Companies can choose whether to adopt IFRS 9 hedge accounting with the rest of IFRS 9 or continue under IAS 39. If you go there will be trouble but if you stay there might be double! This blog explains what difference it would make for a corporate and the relative merits of staying or going.
New IFRS Pronouncements. The following summarizes IFRS pronouncements that must be applied, if applicable, for the first time by a calendar year-end entity that is preparing financial statements in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”). This newsletter sets out new requirements by the calendar year in which they are first effective. Including developments to September 30, 2017.
While the standard will most significantly affect financial institutions, all companies must comply with the new requirements. In this publication, we review the major questions about IFRS 9 affecting non-financial institutions.
How should businesses prepare for the IFRS 9 Classification & Measurement model? PwC Partner Chris Wood explains in our new video.
Allen Ho, Partner at PwC Canada, discusses IFRS 9: Hedge accounting and factors you need to consider for early adoption.
IFRS 9 is the biggest accounting change that we have seen since the adoption of IFRS in Canada in 2011. PwC Partners Ryan Leopold and Chris Wood discuss the new standard and how it impacts nearly all businesses.