IFRS9

IFRS 9, titled "Financial Instruments," is an international accounting standard issued by the International Accounting Standards Board (IASB). It replaced the previous standard, IAS 39, and became effective on January 1, 2018. The standard provides principles for recognizing, measurement, impairment, and hedge accounting of financial instruments.

The primary objectives of IFRS 9 are to ensure that an entity's financial statements provide relevant and reliable information about financial instruments and to streamline the classification and measurement processes. IFRS 9 introduces a forward-looking "expected credit loss" (ECL) model for impairment, which requires entities to account for expected losses early, rather than only recognizing losses when they are incurred.

Under IFRS 9, financial assets are classified into three categories: amortized cost, fair value through other comprehensive income (FVOCI), and fair value through profit or loss (FVPL). The classification depends on the entity’s business model for managing the financial assets and the contractual cash flow characteristics.

The standard also adopts a more principles-based approach to hedge accounting, aligning hedge relationships with risk management strategies and enhancing transparency. For financial liabilities, the standard generally retains the existing measurement principles but introduces specific guidance for modifications and fair value changes.

IFRS 9 has had a significant impact on financial reporting across industries, affecting areas such as credit risk assessment, financial statement disclosures, and risk management practices. Its implementation aims to improve the relevance, reliability, and comparability of financial information related to financial instruments worldwide.