EBI Publications

at each reporting period, even if no actual loss events have taken place. Goal of the IFRS 9 standard This new standard defines the new rules for financial instruments classification and measurement, the impairment of financial assets credit risk and hedge accounting, excluding macro-hedging transactions.  The standard gathers in one single standard the different stages of IAS 39 standard replacement project.  A single and logic approach for the classification and measurement of financial assets, reflecting the economic model within which they are managed, as well as the relevant contractual cash flows. Considered so complicated and inadequate for real practice of financial instruments management within a financial instrument, the IAS 39 standard will be replaced by the new IFRS 9 standard as of 1st January 2018. IFRS 9 responds to criticisms that IAS 39 is too complex, inconsistent with the way entities manage their businesses and risks, and defers the recognition of credit losses on loans and receivables until too late in the credit cycle. IAS 39 considers only past events and current conditions when determining the amount of impairment (i.e., the effects of future credit loss events cannot be considered, even when they are expected). However, IFRS 9 recognizes expected credit losses (ECLs)

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