IFRS 9 Tag

Heraclitus, an ancient Greek philosopher who lived around 500 BC said “The only thing that is constant is change.” This quote is apt for the world of banking in the 21st century. Since the global financial crisis of 2008, there has been a significant change in the way banks conduct their business, how banks are regulated and the accounting for financial instruments.

So, the key question is:  What is the impact of these changes on bank’s financial statements?

Whether you are an accountant, CFO, auditor, regulator or analyst, the new accounting standard on financial Instruments is likely to significantly affect what you do. IFRS 9 Financial Instruments introduces improvements to accounting for financial instruments that could affect the way entities manage their financial assets, price products and implement risk management.

The International Accounting Standards Board (IASB) issued the completed version of IFRS 9 Financial Instruments in July 2014. This standard will replace IAS 39 Financial Instruments: Recognition and Measurement, and is effective from 1 January 2018.

IAS 39 has been widely criticised as being too complex to understand and apply. Sir David Tweedie, former chairman of the IASB mentioned that if anyone went to him and said that he/she had read IAS 39 and understood it, he knew that person was lying. So, whilst IFRS 9 is a welcome change, is it a case of “Too little, too late”?