IFRS 9 Financial Instruments (2 days)
IFRS 9 is effective from 1 January 2018 and replaces IAS 39 Financial Instruments: Recognition and Measurement. It introduces a logical, more principles-based approach to classification and measurement of financial assets based on the business model and nature of cash flows. The new forward looking impairment model requires earlier and more timely recognition, and ongoing assessment of credit losses. The hedge accounting requirements are more principles-based and aligned to common risk management practices.
This course provides a brief overview of IAS 39, and covers an in-depth analysis of principles in IFRS 9. The course has numerous examples and illustrations to explain the business model and cash flow characteristics test for classification of financial assets, amortised cost and fair value measurement of financial assets and financial liabilities, de-recognition of financial assets (retained servicing, continuing involvement etc.), measurement of expected credit losses and the accounting and impact of different types of hedges on financial statements. In addition, it covers the financial instruments disclosures in IFRS 7 and principles in relation to fair value measurement in IFRS 13.
The course is designed to help preparers and users of financial statements to evaluate the impact of IFRS 9 on the business and its financial statements.
- IASB standards applicable to financial instruments: IAS 32, IAS 39, IFRS 7, IFRS 9 and IFRS 13
- Issues with IAS 39 and introduction to IFRS 9
- Definition of financial assets, financial liabilities and equity instruments
- IAS 32 Financial Instruments: Presentation – financial liability versus equity instruments, compound financial instruments and offsetting
- Classification of financial assets and financial liabilities
- Re-cap of IAS 39 classification
- Solely Payments of Principal and Interest (SPPI) criteria
- Business models criteria
- Application of IFRS 9 classification model
- Amortised cost
- Fair value through profit or loss
- Fair value through other comprehensive income
- Fair value option
- Measurement of financial assets and financial liabilities
- Initial recognition including treatment of transaction costs
- Subsequent measurement (IFRS 9 and IFRS 13)
- Debt instruments
- Equity instruments
- Fair value movements due to changes in own credit risk and reporting of it for financial liabilities designated at fair value through profit or loss
- Impact of reclassification of financial assets
- Overview of accounting for derivatives and embedded derivatives in IAS 39
- CVA and DVA for credit risk on derivatives
- Impact of embedded derivatives on the SPPI test in IFRS 9
- Amortised cost assets
- Recognition and measurement under IFRS 9
- Loan commitments
- Fee income and loan origination costs
- Financial guarantees
- Repossessed assets
- De-recognition principles
- De-recognition of financial assets
- Determining whether a “transfer” has occurred
- Transfer/retention of substantially all risks and rewards
- Determining whether an entity retains “control” and measurement of continuing involvement
- De-recognition of financial liabilities
- De-recognition of financial assets
- Impairment of financial assets
- Re-cap of IAS 39 incurred loss model
- Introduction to IFRS 9 expected credit loss model – background, scope and impact of the model
- Application of IFRS 9 expected credit loss model
- 12-month and lifetime expected credit losses
- Determination of significant increases in credit risk
- Measurement of expected credit losses
- Modified financial assets
- Simplification and practical expedients
- Purchase/origination of credit-impaired financial assets
- Individual and collective assessment of impairment
- Key estimates and judgements
- Hedge accounting
- Overview of hedging, accounting for different types of hedges and comprehensive examples to hedge interest rate risk and foreign exchange risk
- Issues with IAS 39 hedge accounting
- IFRS 9 hedge accounting model
- Hedging instruments
- Hedged items
- Qualifying criteria
- Hedge documentation
- Hedge effectiveness requirements
- Discussion paper on macro hedging
- IFRS 9 transition requirements for classification of financial assets and financial liabilities, expected credit loss impairment and hedge accounting
- IFRS 7 Financial Instruments Disclosures
- Group live instruction in a workshop format
- PowerPoint presentations with demonstrated examples
- Case studies and examples for participants to work through in the course
- Participant questions and group discussions on real life case studies
- All participants receive a comprehensive binder containing presentation slides for future reference
- Electronic copies of exercise and case study solutions will be available to participants
Basic understanding of accounting under IFRS or any national standards. No advance preparation is required for this course.
This course is beneficial to preparers and users of IFRS financial statements. The participants will learn the principles in IFRS 9, and its application.
- Classify and measure the financial assets according to the three categories defined in IFRS 9
- Analyse the impact of IFRS 9 on the classification of financial assets in IAS 39, including embedded derivatives
- Classify and measure the financial liabilities according to the two categories defined in IFRS 9
- Evaluate the principles of fair value measurement in IFRS 13
- Apply the principles in relation to de-recognition of financial assets
- Calculate the impairment loss on loans and other financial assets under the expected credit loss model in IFRS 9
- Analyse the estimates and judgements in the expected credit loss impairment model
- Apply the hedge accounting model in IFRS 9 and learn how it is aligned more closely to common risk management practices compared to IAS 39
See what past participants said about this course:
[The instructor] demonstrated an in-depth knowledge of IFRS 9 (course matter) and her gregarious personality provided an enjoyable and interactive class experience.
Andrew Spencer, Manager, BF&M Insurance, Canada
Great experience, great lecturer, very knowledgeable. Looking forward to attending another course.
I prefer IASeminars [to my previous training provider]. Tutors are friendly, patient, treat the subjects very well, answered all questions and did not digress from the course. Course content is very rich and straightforward. My experience is fullfilling and refreshing. I would definitely train with IASeminars again.
Oluwakemi Oluwadamilola Obadan, Head, Tax, Reg. Compl, and Asset Mgt, Bank of Industry Limited, Nigeria
Compared to my previous training provider] better quality of materials, more indepth explanation / examples.
Giorgio Turata, Head of group accounting and reporting, UCC Europe, UK
I have been able to get clarification in some grey areas of IFRS 9. In general, the program was very insightful.
Emmanuel Chukwudi Udochi, Bank of Industry Limited, Nigeria
Course material excellent. Good detailed explanation for future use.
Diane Roberts, Head of Finance, Virtual Lease Services Ltd, UK
Very good trainer. Patient and really clear on all explanations.
Fanny Bueb, Senior Associate,
ATOZ Tax Advisers, Luxembourg
Always excellent training delivery and up to date material and exercises / examples.
Christine Boulanger, Treasurer, Italy
A great investment.
Matthew Greaves, Management Accountant,
Wage Day Advance, UK
[The instructor] was patient and happily explained any items that we needed more info on. Pace was good, not rushed.
Who should attend?
- Financial and management accountants in corporate and financial institutions
- Staff in treasury, operations, risk management, IT or compliance departments
- Internal auditors of entities reporting under IFRS
- External auditors with clients facing the complexities and challenges in adopting and implementing IFRS 9
- Staff and management of Central Banks, Deposit Insurance Entities, and other agencies with regulatory responsibility in the financial services sector
- Financial analysts seeking to improve their understanding of the accounting and disclosures related to financial instruments and the changes impending with IFRS 9
- Professors and other instructors with educational facilities
- First-time adopters of IFRS, seeking to analyze the implications of adopting IFRS 9 initially for accounting for their financial instruments
CPE / CPD Accreditation
IASeminars is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.
Field of study: Accounting
ICAEW Partner in Learning
IASeminars is proud to have been named as an ICAEW Partner in Learning, working together to offer the ICAEW IFRS Certificate to our clients worldwide. ICAEW (The Institute of Chartered Accountants in England and Wales) is a world leading professional membership organisation that promotes, develops and supports over 145,000 chartered accountants worldwide. CPE certificates obtained from attending IASeminars courses are an ideal way for ICAEW members and others to demonstrate their continuing professional development, provided that the topic is relevant to their learning and development needs.
New York State Board of Public Accountancy
IASeminars is registered with the New York State Board of Public Accountancy as a CPE sponsor. Our CPE Sponsor ID is: 002546. This registration does not constitute an endorsement by the Board as to the quality of our CPE Program.
Texas State Board of Public Accountancy
IASeminars is registered with the Texas State Board of Public Accountancy as a CPE sponsor. Our CPE Sponsor ID is: 009689. This registration does not constitute an endorsement by the Board as to the quality of our CPE Program.
- This event will be held at Courtyard by Marriott Zurich North. Detailed Joining Instructions are sent to all registered delegates by email approximately one month before the event. The Joining Instructions will confirm exact venue details and nearby (or onsite) hotel recommendations with bedroom rates where available. Coffee and lunch will be provided.
Saket Modi is a London-based financial trainer and consultant with over 15 years of professional experience. He specialises in delivering courses on advanced accounting, financial reporting and financial analysis topics, particularly with regards to International Financial Reporting Standards (IFRS), International Public Sector Accounting Standards (IPSAS), financial instruments and corporate finance. Saket has spent considerable time working, advising and training on complex IFRS matters - especially in relation to recognition and measurement of financial instruments. He has gained valuable experience working with both FTSE listed companies and also with Big 4 accounting firms. He has designed and facilitated workshops for banks and other financial institutions and also for corporates in the UK, Europe, Africa, Middle East and Asia, and was invited by the International Auditing and Assurance Standards Board® (IAASB®) to present a paper on IFRS 9 Financial Instruments at their board meeting in New York. Saket is a member of the Institute of Chartered Accountants of India, has completed the IFRS certificate course offered by the Institute of Chartered Accountants in England and Wales (ICAEW) and also holds the Diploma in IPSAS from the Chartered Institute of Public Finance and Accountancy (CIPFA). As well as being a qualified accountant, Saket is also a CFA® charterholder.
To bring this course in-house please contact us and we will be pleased to assist