International Financial Reporting Standard 9 (IFRS 9) is a new accounting standard set to replace International Accounting Standard 39 (IAS 39). It introduces a new approach to accounting for financial instruments and is expected to become effective in December 2018. The three main areas covered by IFRS 9 are: classification and measurement of financial instruments, impairment of financial assets, and hedge accounting.
This white paper focuses on the impairment of financial assets aspect of the new standard. The impairment assessment depends on the expected credit losses of the financial instrument and affects the nature of the impairment allowance as well as the way accrued interest is evaluated.