IFRS 9 does not change the basic accounting model for financial liabilities under IAS 39. There are also two categories of valuation: FVTPL and amortized cost. Financial liabilities held for trading purposes are measured under the FVTPL and all other financial liabilities are measured at amortized cost, unless the „fair value“ option is applied. [IFRS 9, paragraph 4.2.1] Hello, Silvia. I am looking at IFRS 9 and watching your video with examples 9 and 10 – De-accounting for financial liabilities. Thanks to your clear explanation, I understand how the company takes into account the amended agreement. But what about the bank? The bank retains financial assets and continues to control them by changing future payments. In both cases, the bank must register Annex 9 and Annex 10 of the P/L of Amendment P.5.4.3 IFRS 9. Does this mean that in expl 9: bank 4,416,977 – losses, expl: the bank records 10,6,078,000 – profits? I hope for your advice. Thank you very much.
Hello Silvia, hello! It`s just a doubt. Does the change in the interest rate on the loan constitute an amendment to the loan agreement in accordance with IFRS 9? The fundamental premise for the IFRS 9 de-accounting model (reproduced in IAS 39) is to determine whether the asset envisaged for de-recognition is: [IFRS 9, paragraph 3.2.2] Very nice article. With regard to basic bank loans, can EIR be considered to be the interest rate indicated by the bank or should it be compared to LIBOR? The SPPI test requires that the contractual terms of the financial asset (as a whole) give rise to cash flows that are only principal and interest payments on outstanding capital, i.e. cash flows consistent with a basic loan agreement. Unlike the economic model, this evaluation must be instrumental. Capital is defined as the fair value of the financial asset at the time of the first collection. Interest is narrowly defined as offsetting the present value of money and credit risk, but can also include offsetting other credit risks, such as liquidity, administrative fees and a profit margin. Cash flows that offer compensation for other risks, such as equity or commodity risks, do not comply with the SPPI test, as they are inconsistent with a basic loan agreement. Hello Silvia thank you for the articles, they helped me in my Acca and I use them most of the time as a reference to work. However, I failed to solve this problem with a loan that was transferred to someone else.
How to treat the transfer in the two different accounts In particular in the event of expected lifetime losses, an entity is required to estimate the risk of default of the financial instrument over its expected lifetime. The expected credit losses of 12 months represent the lifetime liquidity spreads that occur in the event of a default during the twelve months following the balance sheet date, weighted by the probability that this failure will occur. Hello, I would like to know if advances on employees are financial assets? Where an entity terminates the recognition of cash flow hedging operations and guaranteed future cash flows are still expected, the amount accumulated in the cash flow reserve shall remain until future cash flows occur; if guaranteed future cash flows are no longer expected, this amount is immediately reclassified in the income statement [IFRS 9 Paragraph 6.5.12]. . . . .