IFRS 9 Financial Instruments is the new accounting standard for that will have an impact on International banks and financial institutions worldwide. Numerous changes are in place, designed to make annual reports more meaningful to investors as well as simplify how auditors implement the rules and introduce safeguards to ensure that a severe credit crisis cannot emerge again
IAS 39, which is to be replaced with IFRS 9 and other standards include accounting and reporting requirements that are bureaucratic and the source of many mistakes and misunderstandings by the accounting profession. They often inhibit the provision of consistent and meaningful information to investors on the true economic effects of firms’ hedging strategies.
Our aim on the course is to outline recent developments in hedge accounting and to show how the rules can be implemented in practice. We use Excel spreadsheets as well as local examples to illustrate how the accounting policies are implemented across GCC, Europe, Asia, and Africa.
This course specifically focuses on the new rules and reporting standards contained in IFRS 9 which is designed for professionals who have experience of operating under IAS 39 and wish to gain an in-depth understanding of what’s new in IFRS 9 and the implications for the design, management, and reporting of hedging strategies.
From 1 January 2018 companies applying IFRS will be required to adopt IFRS 9, an accounting standard which has taken nearly ten years from the first draft to implementation, returns to a more prudent approach to impairment with the expected loss model, a business model test for classification and a relaxation of many of the prohibitively complex hedging rules from its predecessor IAS 39. Whilst the financial services sector will see the most significant impact, IFRS 9 implementation will have a significant impact on all companies with most commentators saying that IFRS 9 is good for corporates. Find out why.
You might be interested in another Finance and Accounting courses as a next step.
This course is endorsed by ACCA Global.
YOU WILL LEARN HOW TO
Your study will increase your knowledge and understanding of IFRS while teaching you how to apply these standards. With your certificate in hand, and you’ll be familiar with the structure of the framework of international accounting, know how to apply the standards to key elements of financial reports, identify and apply disclosure requirements for companies in financial reports and notes, and prepare group financial statements including subsidiaries, associates and joint ventures.
IMPORTANT COURSE INFORMATION
Participants who fully attend this course and complete the test on the last day will receive a Strategic Axis Professional Certificate (SAPC). SAPC certificates are regionally recognized and can be quite valuable when applying for more senior roles within the organization or outside.
Exam
A number of exams:
One exam (split into two sections)
Types of questions:
Section A: One ‘groups’ questions (40 marks)
Section B: Three scenario questions (60 marks)
Duration:
3 hours (closed-book exam)
Scoring:
A minimum score of 50 percent is required to complete the exam
Exam Dates:
June 9
December 9
COURSE OUTLINE
Requirements for recognizing financial assets and financial liabilities
Principles-based v Rules-based accounting
Reducing complexity in reporting financial instruments
Lessons from the Financial crisis
Requirements for recognizing financial assets and financial liabilities
Principles-based v Rules-based accounting
Reducing complexity in reporting financial instruments
Lessons from the Financial crisis
Module 2: IFRS 13 Fair Value Measurement
Impact of the revised definition of fair value
Level one two and three assets
Recurring and nonrecurring assets
Disclosure requirements
Observable and non-observable inputs
Module 3: Replacement of IAS 39
Classification and measurement of financial assets and financial liabilities
Impairment methodology
Hedge accounting
Impact of change in accounting Framework
Module 4: Impairment Methodology
Objective Evidence and elimination of threshold for impairment
Expected credit losses
One year v Lifetime expected losses
Practical application guidance
Module 5: Hedge Accounting
Aligning hedge accounting with risk management Accounting for open portfolios and macro hedging Fair value hedge of an interest rate portfolio
Accounting policy choice applying existing hedge requirements of IAS 39 or new requirements of IFRS 9
Module 6: Recognition and Derecognition of financial assets
Risks and rewards of ownership
Beneficial interest
Control over an asset and accounting implications
Off-balance sheet accounting
Module 7: Impact between IFRS 13 and IFRS 9
Level one assets
Level two assets
Level three assets
Operational risk and conflict of interest
Module 8: Application of IFRS 9
Subsidiaries and accounting treatment under IFRS 10,11 and 12
Lease accounting IAS 17
Derivatives embedded in leases
Pension accounting IAS 19
Module 9: Review of Accounting Standards
Hedge Accounting
Marktomarket V Cost
Credit Value Adjustment
Hedging Rules
Case Study First Rand Group Accounting Policies
Module 10: IFRS 9 – Classification of Financial Assets
Business Model and Cash Flow characteristics
Reclassification of assets
Applying the Fair Value Option to banks
Subsequent measurement
Module 11: Accounting for Derivatives and Embedded Derivatives
Role of embedded accounting rules
Changes under IFRS 9
Case Study Accounting for Structured Products under IFRS 9
Module 12: Hedge Accounting – the new rules
Three types of hedge, cash flow, fair value and hedge of a net investment
Other Comprehensive Income
Problems with hedge accounting
Time value and Intrinsic Value of Options
Module 13: IFRS 9 Hedge Accounting – New Qualifying Criteria
Qualifying hedges under IFRS 9
Equity Investments and Comprehensive Income
Available for Sale, Held to Maturity changes
Module 14: IFRS 9 Hedge Accounting – Effectiveness Assessment
Quantitative and Qualitative controls
Testing for hedge effectiveness under the new rules
Documentation
Procedure for audit
Case Study Hedging and Documentation for Foreign Exchange Transaction
