IFRS 9 Financial instruments

Setting 1 complete scene the Expected Credit Losses model

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Topics hide the Expected Credit Losses model Decision tree ECL Model (1) Simplified approach ECL for trade receivables, contract assets and lease receivables (2) Purchased or originated credit-impaired assets (3) + (5) Option – practical expedient low credit risk financial assets (4) Assessing a significant increase in credit risk (6) Recognise lifetime ECL Portfolio or … Read more

Expected credit losses on financial assets

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Expected credit losses on financial assets relates to the impairment requirements that are applied to: Financial assets measured at amortised cost (originated, purchased, reclassified or modified debt instruments incl. trade receivables), Financial assets measured at fair value through other comprehensive income, Loan commitments except those measured at fair value through profit or loss, Financial guarantees … Read more

Payment holidays on loans

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Topics hide Payment holidays on loans under IFRS 9 What is this all about? Accounting treatment of payment deferrals – Overview Treatment of payment holidays under IFRS 9 – Loan classification and measurement IFRS 9 – Classification, measurement and interest income recognition Authorities’ public statements on Covid-19 related payment deferrals Disclosure Practical considerations – Overview … Read more

Blockchain – Best 2 accounting for IFRS

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Topics hide Blockchain accounting for IFRS Holding cryptocurrencies – e.g. Bitcoin, Ether etc Holding or issuing cryptoassets – e.g. tokens/coins Holding cryptocurrency and cryptoassets as a broker-trader Crypto mining Tax on digital assets Blockchain accounting for IFRS Holdings of cryptocurrencies allow individuals and businesses to transact directly with each other without an intermediary such as … Read more

Initial measurement financial instruments

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Topics hide Initial measurement Financial instruments The ‘which’ and ‘how’ of fair value measurement Trade receivables Food for thought – Measuring trade receivables on initial recognition Measurement of fair value Food for thought – Market Food for thought – Market participant assumptions Fair value of offsetting market risk or counterparty credit risk for groups of … Read more

Amortised cost and the effective interest method

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Topics hide Amortised cost and the effective interest method Calculating amortised cost Calculating the EIR 1. General approach 2 Credit-adjusted EIR 3 Calculating interest revenue and expense using the EIR 4 Revisions to estimated cash flows 5 Modifications of financial assets Amortised cost and the effective interest method This narrative explores the factors that an … Read more

Purchased and originated credit-impaired financial assets – IFRS 9 Best Read

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Topics hide Purchased and originated credit-impaired financial assets Initial measurement credit-impaired financial assets Subsequent measurement credit-impaired financial assets Modified contractual cash flows Day 1 loss Credit-adjusted EIR Calculating credit-impaired interest revenue and expense Purchased and originated credit-impaired financial assets Purchased and originated credit-impaired financial assets are those for which one or more events that have … Read more

Interest free loans in IFRS 9 and IAS 20

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Interest free loans As prescribed in IFRS 9.B5.1.1, a loan payable or receivable that carries no interest should be recognised at fair value measured as the present value of all future cash receipts discounted using the prevailing market rate(s) of interest for a similar instrument (currency, term, etc.) with a similar credit rating. An incremental … Read more

Equity – 2 understand it all at best

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Topics hide Equity 1. Equity the residual interest in the assets of the entity after deducting all its liabilities 1. Statement of Financial Position 2. Equity instrument is the contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities 2. Statement of Financial Position 3. Equity interests … Read more