IFRS 9 changes.
In summary, IFRS 9 will replace IAS 39 Financial Instruments and bring together the following aspects of accounting for financial instruments: classification and measurement; impairment; and hedge accounting.
IFRS 9 is relevant to many different companies but will have the greatest effect on financial institutions.
In practice, the most significant change will be in the way financial institutions account for loan losses. IFRS 9 replaces the incurred loan loss model of IAS 39 with an expected loan loss model. The new model is likely to result in greater loan loss provisions by financial institutions and will provide investors with useful information on changes in credit risk exposure.
IFRS 15 changes.
IFRS 15 will replace IAS 18 Revenue and IAS 11 Construction Contracts. It will establish a comprehensive framework for determining when to recognise revenue and how much revenue to recognise. It is expected to increase comparability among companies across sectors and markets. IFRS 15 will affect almost all companies because it covers revenue from all contracts with customers, except for revenue from leases, financial instruments and insurance contracts.
Heads up for investors.
Investors should find useful information in the notes to companies’ financial statements about the expected impact of a new Standard even before companies apply that Standard (this is a requirement in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors). For IFRS 9 this might include information about how loan loss provisions are likely to change, and for IFRS 15 it might include information about the likely effects on the amount or timing of revenue recognition. Implementation assistance for companies.
The Board provides educational materials to assist companies applying an IFRS Standard for the first time. Examples of such materials include articles, videos and web presentations.
Furthermore, both IFRS 9 and IFRS 15 were supported by Transition Resource Groups (TRG)—public discussion forums established to provide support for stakeholders on implementation issues arising from the new Standards.
As a debt capital-focused securities exchange, FMDQ also provides a robust platform for the listing of Mutual and Exchange Traded Funds. Mutual Funds are investment vehicles operated by money managers, which typically pools funds from investors for the purpose of investing the funds in securities such as stocks, bonds, and money market instruments. They are also classified according to the types of securities invested in. Fixed Income Mutual Funds, which are focused primarily on investments in government and corporate bonds; and Money Market Mutual Funds (or Money Market Funds) which are focused on investments in short-term debt securities such as treasury bills and commercial papers, are permitted for listing and trading on FMDQ, in line with the provisions of the FMDQ Bond Listing and Quotation Rules. Exchange Traded Funds (ETFs) are marketable securities that track an index, a commodity, bond, or a basket of assets. Unlike mutual funds, ETFs are traded on an exc...
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