Application of IFRS 9 to the natural resources sector
01 October 2018
The origins of IFRS 9 Financial Instruments stem from the global financial crisis and is a very significant standard for the banking sector. Whilst the impact on IFRS 9 is not as great on nonfinancial entities, those in the natural resources sector should not ignore its impacts.
The key features of IFRS 9 to be considered by those in the natural resources sector include:
- Moving from an incurred loss model to a predicted loss model
- The strict rules as to which financial assets can be recorded at amortised cost
- Investments in unlisted shares to be recorded at fair value
- Simplified hedge accounting rules.