Accounting for Financial Instruments under IFRS 9

• Understanding the challenges of IFRS 9.

• Learn specific vocabulary.

• Mastering IFRS 9 accounting principles.

• It should be noted that most credit institutions continue to apply IAS 39 for hedge accounting. The IFRS 9 rules on hedge accounting will therefore be discussed only briefly. 

Part 1. Introduction

• Explain the regulatory environment.

• Accounting issues :

• • Amortised cost.

  • Fair value.

  • Depreciation

Part 2. IFRS 9: Classification and measurement of Financial Instruments

The new asset categories defined by IFRS 9 :

• The portfolio at amortised cost :

• • Business model test.

  • Basic or non-basic instrument (SPPI test on the characteristics of the financial instrument).

• The portfolio at fair value through profit or loss.

• The portfolio at fair value through recyclable OCI.

• The portfolio at fair value per OCI is not recyclable.

• Upgrades :

• • Summary of the transition from the old categories to the new ones.

• The various portfolios on the liabilities side :

• • Liabilities measured at amortised cost.

  • Trading activities.

  • The various “fair value options”.

  • Own credit risk.

• The format of banks' financial statements under IFRS 9 (ANC 2017-02).

Part 3. IFRS 9: Impairment of Financial Assets

• The weaknesses of the current system.

• The expected loss model vs. the actual loss model.

• The concepts of expected losses (EL) 12 months and at maturity.

• The three credit risk assessment portfolios.

• The specific case of impairment of the portfolio at fair value by recyclable OCI.

Part 4. IFRS 9: Hedge Accounting

• Designation of hedging instruments.

• Definition of items covered.

• The new conditions for qualifying hedging transactions :

• • Economic link.

  • Virtually no credit risk.

  • Coverage ratio.

• Discussion paper on macro-hedging.

Part 5. Other Topical Issues

• An update on accounting news based on new texts and projects.

Good knowledge of IFRS

• Anyone interested in developments in IFRS accounting standards for banks and current projects.

• Statutory Auditors and their staff.