Two major IFRS standards issued in 2014 became effective for reporting periods starting on or after 1 January 2018.
IFRS 9 Financial Instruments
IFRS 9 replaces IAS 39 Financial Instruments: Recognition and Measurement. It consists of three different parts:
- classification and measurement
- hedge accounting.
The most significant change resulting from IFRS 9 is how banks account for loan losses, though the standard is also relevant for other companies.
Amongst the huge number of comments on IFRS 9, one from Deloittes web-site sums up the general opinion, “The International Accounting Standards Board (IASB)’s IFRS 9 standards will require banks to recognise impairment sooner and estimate lifetime expected losses against a wider spectrum of assets. The implementation of these standards in January 2018 are widely expected to increase the stock of credit impairment provisions and affect profits.”
IFRS 15 Revenue from Contracts with Customers
IFRS 15 which replaces two Standards - IAS 18 Revenue and IAS 11 Construction Contracts - also went live at the start of 2018. It specifies:
- when and how much revenue a company should recognise
- the information about revenue that the company should disclose in its financial statements.
PwC report that, “All IFRS reporters will be impacted by IFRS 15 when it becomes effective in 2018. Some industries will experience greater changes than others. The impact to your business, systems, data needs and financial reporting will be far reaching.” PwC have developed a five step model for dealing with IFRS 15, see.
IFRS 9 for corporates: what does it mean and are you ready?
Adoption of IFRS 9 is two years away – or less for early adopters. What are the implications for non-financial corporates and how can they ensure compliance with the new accounting standards?
12-month countdown to IFRS 15 and IFRS 9
The International Financial Reporting Standards (IFRS) website has issued a reminder of some of the changes that companies need to look out for when IFRS 9 and IFRS 15 are brought in next year
IASB calls for feedback on IFRS 15 deferral
The IASB has announced its call for feedback on its proposal to defer the effective date of the revenue Standard, IFRS 15 Revenue from Contracts with Customers, by one year to 1 January 2018.