IFRS 9 - Prepare for Financial Instruments standard changes

Plan for change

The new global financial instruments standard has been issued by the IASB. The new standard, IFRS 9 - Financial Instruments, fundamentally rewrites the accounting rules for financial instruments. It introduces a new approach for financial asset classification, a more forward-looking expected loss model and major new requirements on hedge accounting.

Areas where you might encounter change

The new pronouncements may not only necessitate updates to existing financial accounting policies, procedures and systems, but also affect controls and contracts. Even if accounting policies are not affected, significant new disclosures are required that suggest the need for planning.
We believe that most companies will need to consider making changes in the following areas:

• accounting policies and disclosures;
• processes to develop and incorporate many new management judgments into financial instrument accounting;
• related internal controls that will require updating, if not overhauling, as a result of changes to accounting policies and processes;
• systems to capture, process and report new data;
• income and other taxes;
• classification and measurement of financial instruments;
• impairment; and
• hedging accounting.