IFRS 9 Financial Instruments

IFRS 9 Financial Instruments

Monday 19 Oct 2020

  • Duration: One Week
  • City: London
  • Fees: Classroom: 3950 GBP / Online: 1975 GBP

Overview

IFRS 9 Financial Instruments is the IASB’s replacement of IAS 39 Financial Instruments: Recognition and Measurement. The Standard includes requirements for recognition and measurement, impairment, derecognition and general hedge accounting.

This course provides an in-depth analysis of IFRS 9 Financial Instruments. It provides 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 disclosures in IFRS 7 and the principles of fair value measurement in IFRS 13.

This course will enable you to:

  • Consider the three separate IFRS areas regarding accounting for financial instruments
  • Recognise and measure financial instruments
  • Understand how to deal with financial instruments that are transferred in full or part, or items that are derecognised
  • Classify and measure financial assets under the three categories in IFRS 9
  • Analyse the impact of IFRS 9 on the classification of financial assets, including embedded derivatives
  • Classify and measure financial liabilities under the two categories 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

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 IFRSs
  • 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 introduced by IFRS 9
  • Professors and other instructors with educational facilities
  • First-time adopters of IFRSs, seeking to analyse the implications of applying IFRS 9 initially

Course Content

Day 1

IAS 32 Financial Instruments Presentation

  • ASB standards applicable to financial instruments: IAS 32, IAS 39, IFRS 7, IFRS 9 and IFRS 13
  • 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
  • Interest, dividends, losses and gains
  • Offsetting financial assets and liabilities
  • Statement of financial position
  • Three impacts

Day 2

IFRS 9 Financial Instruments

  • Overview of IFRS 9
  • A potted history
  • Timings
  • Recognition and derecognition
  • Accounting treatments
  • Classification and measurement
  • Two tests
  • Barnaby Ruffles’ securities
  • IFRS 9 and impairment
  • Impairment
  • Credit Cars’ ECLs
  • Impacts
  • Are you up to Standard?

Day 3

IFRS 9 and Hedge Accounting

  • Overview of hedging, accounting for different types of hedges and comprehensive
  • Objectives and scope
  • Which items qualify as hedges?
  • Accounting for hedging relationships
  • Hedging groups of items
  • Issues with IAS 39 hedge accounting
  • IFRS 9 hedge accounting model
  • Hedging instruments
  • Qualifying criteria
  • Hedge documentation
  • Hedge effectiveness requirements
  • Rebalancing
  • Discontinuation

Day 4

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 it for financial liabilities designated at fair value through profit or loss

Day 5

Impairment of financial assets

  • Introduction to IFRS 9 expected 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
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