Why you need to work with BDO on IFRS 9 ‘Financial Instruments’

Failing to implement IFRS 9 adequately could lead to profit warnings, delays in lodging financial statements, qualified audit reports and even a loss of investor confidence and sharp falls in share price.

IFRS 9 may also change amounts reported in financial statements with knock on effects on bonuses or earn-outs linked to revenue or profit, finance charges where interest rate margins are linked to key ratios, and breaches of bank covenants.

Our expert team will carry out a robust and independent impact assessment of all the possible effects of IFRS 9 on your business. We want you to be confident that you are taking all the necessary steps and that your business is ready for IFRS 9.

We will also provide advice and guidance on any aspects of IFRS 9 that may be of particular concern or relevance to your business. Please get in touch to discuss how we can help.

For further details of how we can help, view our Financial Reporting Solutions page.

IFRS 9 ‘Financial Instruments’ information and guidance

We have produced a comprehensive range of information and documents to help you understand and prepare for IFRS 9.

Overview of IFRS 9 ‘Financial Instruments’

IFRS 9 Financial Instruments introduces new requirements that will affect entities across all industry sectors, not just those in financial services. It is applicable for periods beginning on or after 1 January 2018, but earlier adoption is permitted. IFRS 9 replaces IAS 39.

IFRS 9 ‘Financial Instruments’ key features

Introduction of new measurement requirements for financial instruments, with a different mixture of amortised cost and fair value
A new forward looking expected loss impairment model, which requires consideration of macroeconomic data and forecasts of future events
Changing requirements for hedge accounting to link better with risk management approaches.

IFRS 9 Documentation

The following guides and publications provide useful information and advice on IFRS 9 and its key features:

Applying IFRS 9 to Related Company Loans
Applying IFRS 9 to related company loans can present a number of application challenges as they are often advanced on terms that are not arms-length or sometimes advanced on an informal basis without any terms at all. This publication sets out a summary of the key requirements of IFRS 9 (focusing on those that are likely to be most relevant to related company loans) and uses examples to illustrate how these requirements could be applied in practice.
Applying IFRS 9 to Related Company Loans in the real estate sector
This publication contains more detailed examples which illustrate the application of IFRS 9 to a number of common intragroup funding structures in the real estate sector.
IFRS at a Glance – IFRS 9 Financial Instruments
A short ‘key facts’ document, setting out the key requirements for each of the areas under IFRS 9, the key application guidance, definitions and the practical expedients available.
IFRS in Practice – IFRS 9 Financial Instruments
This publication sets out practical information and examples about the application of key aspects of IFRS 9.
Need to know – IFRS 9 Financial Instruments – Classification and Measurement
This covers final requirements in relation to the classification and measurement of financial assets and financial liabilities in IFRS 9 (2014) and compares these requirements to those in IAS 39 Financial Instruments: Recognition and Measurement and previous versions of IFRS 9.
Need to know – IFRS 9 Financial Instruments – Impairment of Financial Assets
A summary of the impairment model under IFRS 9 and associated disclosure requirements under IFRS 7.
Need to know – IFRS 9 Financial Instruments – Hedge Accounting
This covers the application of the hedge accounting requirements that were introduced into IFRS 9, and associated disclosure requirements under IFRS 7.

We also provide regular updates on this subject through our Business Edge email newsletter.

Videos which explore various aspects of IFRSs are available to view on the BDO IFRS YouTube channel.