Question: Does IFRS 9 replace IAS 36?

As a result of the issue of IFRS 9, IAS 36 is amended to: Exclude financial instruments accounted for in accordance with IFRS 9, rather than IAS 39. Refer to IFRS 9 for the impairment of financial assets not within the scope of IAS 36.

What did IFRS 9 replace?

IFRS 9 replaces IAS 39, Financial Instruments – Recognition and Measurement. It is meant to respond to criticisms that IAS 39 is too complex, inconsistent with the way entities manage their businesses and risks, and defers the recognition of credit losses on loans and receivables until too late in the credit cycle.

What is the scope of IFRS 9?

IFRS 9 divides all financial assets that are currently in the scope of IAS 39 into two classifications - those measured at amortised cost and those measured at fair value.

What is the impact of IFRS 9 on banks?

IFRS 9 – Aligns the measurement of financial assets with the banks business model, contractual cash flow characteristics of instruments, and future economic scenarios. Banks may have to take a “forward-looking provision” for the portion of the loan that is likely to default, as soon as it is originated.

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