IFRS 9 — Financial Instruments

About

IFRS 9 is effective for annual periods beginning on or after 1 January 2018 with early application permitted.

IFRS 9 specifies how an entity should classify and measure financial assets, financial liabilities, and some contracts to buy or sell non-financial items.

IFRS 9 requires an entity to recognise a financial asset or a financial liability in its statement of financial position when it becomes party to the contractual provisions of the instrument. At initial recognition, an entity measures a financial asset or a financial liability at its fair value plus or minus, in the case of a financial asset or a financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or the financial liability.

What you should know

• Know and apply the definitions related to financial instruments.
• Classify financial assets based on the business model and contractual cash flow characteristics.
• Measure financial assets at amortised cost, fair value through other comprehensive income or fair value through profit or loss.
• Classify and measure financial liabilities.
• Apply the recognition and derecognition principles for financial assets and financial liabilities.
• Apply the expected credit loss model to financial assets.
• Understand the basic principles of hedge accounting.
• Present and disclose financial instruments in accordance with the relevant IFRS requirements.