IFRS Implementation Guide: An Overview of the Impairment Requirements of IFRS 9 Financial Instruments

Category: IFRS

IFRS Implementation Guide: An Overview of the Impairment Requirements of IFRS 9 Financial Instruments

In July 2014, the International Accounting Standards Board (IASB) completed Phase 2 of its financial instruments project related to impairment and, as such, published the final version of IFRS 9 Financial Instruments . IFRS 9 replaces IAS 39 Financial Instruments: Recognition and Measurement, and is effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted.

IFRS 9 uses an expected credit loss (ECL) model which replaces the current incurred loss model under IAS 39. The IFRS 9 impairment requirements aim to address concerns raised during the financial crisis relating to the current IAS 39 incurred loss impairment model which delays the recognition of impairment until there is objective evidence of impairment. The IFRS 9 requirements also reduce the complexity of impairment testing by requiring the same model for all financial instruments subject to impairment testing.

This guide highlights the objective of the impairment methodology and the key differences between the IAS 39 and IFRS 9 impairment models. It also provides an overview of the requirements and illustrative examples to assist in the application of the new IFRS 9 ECL model.

An Overview of the New Hedging Requirements of IFRS 9 Financial Instruments

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Michelle Balmer

Michelle Balmer CPA, CA

Vice President, Assurance

Michelle Balmer, CPA, CA, is a Senior Assurance Services Partner with MNP. With 14 years of experience in public practice, Michelle helps a broad range of public and privately held companies in a variety of industries. She also works on special projects, including costing studies, benchmarking and best-practice studies, operational analyses, litigation support and due diligence.

As a key member of MNP's Assurance team, Michelle has played an instrumental role in assurance policy development, implementing accounting and assurance standards firm-wide and educating assurance practitioners regarding methodologies and new pronouncements. She also provides technical advice and consultation on accounting and assurance issues, as well as on rules of professional conduct issues, to all MNP practitioners.

Michelle was certified a Chartered Accountant (CA) after obtaining a Bachelor of Commerce degree from the University of Alberta. She has been actively involved with the Institute of Chartered Accountants of Alberta, including the Chartered Accountants School of Business, in an instructional and marketing capacity. An avid volunteer, she has assisted numerous groups such as the Easter Seals of Alberta, Paralympic Sports Association and Junior Achievement of Northern Alberta.