IFRS 9 despite the wide perception actually affects not only
financial institutions but much more organizations. This is the case especially
when an entity has long-term loans, equity instruments or any other financial
assets. Even entities with short-term receivables are also affected.
IFRS 9 can affect entities in different ways such as:
- It increases the volatility of the presentation
of the income statement. More assets than before would have to be measured at
fair value with any increase or decrease in their fair value to be recognized
instantly as they appear in profit and loss.
- Entities will now have to provide for any
possible future credit losses on their receivables (including trade
receivables) and loans. This provision shall take place even when a receivable
(e.g. loan) is recognised for the first time in the entity’s financial
statements; even if the possibility of future credit loss is highly unlikely.
- IFRS 9 also introduces new disclosure requirements
that some entities will have to adopt in order to process the required data
needed to be disclosed.
You can find the most significant changes introduced by IFRS 9 by clicking here.
In case you need any further clarifications or assistance on
how to adopt your company to IFRS 9, please contact us at:
T: +357 25443132
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