IFRS 9: the information you need to know

What is IFRS 9? If you want to understand what IFRS 9 is, you will also have to understand what IFRS 39 is. In this article, we hope you will gain some knowledge about IFRS 9 and what it exactly means. Please find below the important information you might need.

What is IFRS 9?

If like many others, you’ve never heard of IFRS 9 but will come across it, this article is useful, it may even be a real godsend. In fact, you’ll find more on the subject as you read on. The description of this term will be presented. In addition, it discusses where you can get more information. Note: although you may think you need basic knowledge for this topic, it is not necessarily necessary.

What exactly does IFRS 9 mean?

We’ll go back a few years to explain this. Namely, it is the year 2014, when the International Accounting Standard Board published this standard. As such, this is the standard for the reporting of financial instruments. So, as we announced earlier, IAS 39 has been replaced by IFRS 9. Let’s start with the why. Because why exactly has IAS 39 been replaced? There is a reason.

IAS 39 was replaced by IFRS 9 because there were many financial institutions that felt that this standard was difficult to apply. So it was a choice to make it easier to implement, something that is used quite often. This new standard then started to apply to the financial years that followed. Namely on or after January 1, 2018. So it’s been playing out for quite a few years, but it’s good that you know about it now. Are you active in the economic sector, financial sector, or elsewhere? It can always be good to brush up on your general knowledge.

We will now go into more detail about the IFRS 9. In fact, IFRS 9 consists of the following three main parts:
  • Classification and measurement
  • Hedge accounting
  • Impairment
We will briefly discuss the topics for you so that you can get a better understanding of what these basic components exactly entail. Let’s start with classification and valuation. If you know what accounting rules are, you’re already way ahead. This includes the accounting rules for the valuation as well as the classification of financial assets. You have to value all financial assets at cost. And then there are some other rules that also apply here. You’ll have to look them up yourself in our other article.

The next important topic is hedge accounting. Maybe you have heard of that term before. If we talk about IFRS 9 hedge accounting, is among other things, the goal of aligning hedge accounting with the activities you do around risk management. It also helps to provide you with information. You can make strategic choices within risk management.

And then the last part: with impairment you will recognize credit losses sooner.

Need more information? Then read the conclusion!

Do you want to know more about IFRS 9 or do you simply need more information about annual reporting, which is really important indeed? Please ask your questions. We want to help you gain more knowledge. Please visit annualreporting.info if you want to know more!