Sunday, December 7, 2014


What will be the impact of the IASB's fourth and final version of its new standard on financial instruments accounting - IFRS 9 Financial Instruments?

According to KPMG, the biggest impact will be on banks, while also significant for insurers.

 Chris Spall, KPMG’s global IFRS financial instruments leader, said:
“The new standard is going to have a massive impact on how banks account for credit losses on their loan portfolios. Provision for bad debts will be bigger and are likely to be more volatile”.

Non-convergence between between US GAAP and IFRS will also mean a lack of comparability costs for those banks that have to prepare figures under both accounting frameworks.

 Colin Martin, head of KPMG UK assurance services, banking, said:
‘‘A major issue for banks and investors in banks will be how adoption of the new standard will affect regulatory capital ratios. Banks will need to factor this into their capital planning and we expect that users will be looking for information on the expected capital impacts”.

Other corporate should not automatically assumes that the impact of the classification and measurement and impairment requirements of the new standard will be small, as it depends on the exposures they have and how they manage them. Planning for IFRS 9 adoption-including implementation of the new hedge accounting requirements published in 2013 - is expected to be an important issue for corporate treasures and accountants generally, said Spall.

sources:The Malaysians Institute of Accountants,Accountants Today,Sept/Oct, 2014