IFRS Topics

Last update 27/10/2019 Topics hide IFRS 9 Reclassification of financial instruments Equity investments Related posts: IFRS 9 Reclassification of financial instruments For financial assets, reclassification is required between FVTPL, FVTOCI and amortised cost, if and only if the entity’s business model objective for its financial assets changes so its previous model assessment would no longer … Read more

Last update 02/12/2019 IFRS 9 Profit participating loan – Parent A advances €1m to Subsidiary B on 1 January 2018 with the following terms: 5% interest; 30% of the annual appreciation in the property value; €1m repayable in 5 years – December 2022. Classification As the loan is in a ‘hold to collect’ business model, … Read more

Last update 11/12/2019 This IFRS 9 Practical Hedge documentation template can be used as the basis for the formal documentation required by IFRS 9. However, every hedge is a specific transaction so changes should be made based on the actual situation to document. In section 9 there is room to add smaller additions and/or attachments … Read more

Last update 02/12/2019 IFRS 9 Interest-free demand or term loan or Senior bank term debt Parent A advances a €200k unsecured loan to Subsidiary B on 1 January 2018 with the following terms: 0% interest and repayable on demand; or IFRS 9 Interest-free demand or term loan 0% interest and repayable in 5 years (assume … Read more

Last update 27/11/2019 Inflation as a risk component – Under IAS 39, inflation cannot be designated as a hedged risk component for financial instruments, unless the inflation risk component is contractually specified. For non-financial instruments, inflation risk cannot be designated under IAS 39 as a risk component at all. Inflation as a risk component Highlight … Read more

Last update 04/12/2019 IFRS 9 Impairment of Financial Instruments establishes a new model for recognition and measurement of impairments in loans and receivables that are measured at Amortized Cost or FVOCI—the so-called “expected credit losses” model. This ECL model is the only impairment model that applies in IFRS 9 because all other assets are classified … Read more

Last update 31/10/2019 IFRS 9 Full derecognition of financial assets is part of a decision model for the derecognition of financial assets. The derecognition can be a full derecognition, a full continued recognition, a full derecognition with recognition of new assets or liabilities retained or a continued involvement. The model is starting here. Derecognition of … Read more

Last update 12/11/2019 IFRS 9 Financial Instruments Measurement uses the following criteria for determining the classification and measurement of financial assets at Amortized Cost, Fair Value through Other Comprehensive Income (FVOCI) or Fair Value through Profit or Loss (FVPL): The critical issues for classifying and measuring financial assets are whether: The objective of the entity’s … Read more

Last update 31/10/2019 IFRS 9 Financial assets continued involvement is part of a decision model for the derecognition of financial assets. The derecognition can be a full derecognition, a full continued recognition, a full derecognition with recognition of new assets or liabilities retained or a continued involvement. The model is starting here Derecognition of financial … Read more

Last update 04/01/2020 IFRS 9 Financial asset classification provides an overview of the financial asset classification requirements under IFRS 9 and the differences with IAS 39, as per below table: Categories Conditions to be Met Impact Amortized Cost The financial asset is held within a business model whose objective is to hold financial assets in … Read more