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AASB 9 articles and publications – Banks and corporates take note

BDO has recently appeared in various articles and publications regarding the implementation of AASB 9 Financial Instruments. These serve as useful guidance when determining the impacts of AASB 9 adoption on your business, which could be significant if you are a bank or financial institution.

Global Public Policy Committee (GPPC) article on implementation of IFRS 9 impairment issues by banks

The new expected loss impairment model is particularly challenging for banks to implement, and we expect this to be subject to scrutiny by prudential regulators, securities regulators and audit regulators, all of which will expect to see high quality implementation of the new model.

The Global Public Policy Committee (GPPC), which comprises representatives of BDO, Deloitte, EY, Grant Thornton, KPMG and PwC, recently published a paper, ‘The implementation of IFRS 9 impairment requirements by banks – Considerations for those charged with governance of systemically important banks’.

The aim of the paper is to promote the high quality implementation of the IFRS 9 expected loss model, and to assist those charged with governance when assessing management’s progress during the transition and implementation period. While the paper is aimed primarily at systemically important banks (SIBs), i.e. banks that are Global SIBs, banks that have been designated by their supervisor as a domestic SIB, or banks that are under the supervision of the European Central Bank, some of its content may also be relevant to other banks and financial institutions.

Why corporates should take note of IFRS 9 impairment implementation issues

The May 2016 Chartered Accountants Australia and New Zealand’s Acuity magazine featured an article in their Perspective Series by Wayne Basford, FCA, IFRS Leader Asia Pacific, and Judith Leung, CA, senior manager at BDO called ‘Why corporates should take note of IFRS 9 impairment implementation issues’ .

Shortly after the release of the full version of AASB 9, the International Accounting Standards Board (IASB) set up a Transition Resource Group for Impairment of Financial Instruments (ITG) to discuss implementation issues related to the new impairment model for financial assets. While most of the ITG discussions have been from a banking perspective, some issues will pose practical challenges for corporates. This article looks at the ITG discussions that are relevant to corporates.

Why the use of options as hedging instruments is more appealing under AASB 9

The December 2015 Chartered Accountants Australia and New Zealand’s Acuity magazine featured an article in their Perspective Series by Judith Leung, CA, senior manager at BDO called ‘Why the use of options as hedging instruments is more appealing under AASB 9’ .

The good news is that the movement in the time value component of the fair value of an option, previously recognised in profit or loss under AASB 139 Financial Instruments: Recognition and Measurement, is recorded in other comprehensive income (OCI) under AASB 9 Financial Instruments.

More information

Please refer to our Issues and Trends page for more information on IFRS 9 and other new standards.

This publication has been carefully prepared, but is general commentary only. This publication is not legal or financial advice and should not be relied upon as such. The information in this publication is subject to change at any time and therefore we give no assurance or warranty that the information is current when read. The publication cannot be relied upon to cover any specific situation and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact the BDO member firms in Australia to discuss these matters in the context of your particular circumstances.

BDO Australia Ltd and each BDO member firm in Australia, their partners and/or directors, employees and agents do not give any warranty as to the accuracy, reliability or completeness of information contained in this article nor do they accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it, except in so far as any liability under statute cannot be excluded. Read full Disclaimer.