IFRS 9 Financial Instruments

17 July 2017

IFRS 9 introduces new requirements that will affect entities across all industry sectors. Although it is true that the most significant effects will be for entities in the financial sector, it would be a mistake to assume that there will be limited effects elsewhere. Revisions to the boundary between amortised cost and fair value measurement will change the profle of balance sheets and whether changes in fair value are recognised in profit or loss or other comprehensive income. The new forward looking expected credit loss impairment model may require signifcant changes to systems and processes, with provisions being greater in size and recognised earlier than under the current incurred loss model. Hedge accounting requirements will also change, with these being more closely linked to internal risk management practices.