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IFRS 9 replaces IAS 39 and introduces new requirements on classification, measurement and expected credit losses for financial instruments. Learn the key provisions, effective date and transition, and how to assess the impact of the new standard.
IFRS 9 is the IASB's standard for accounting for financial instruments, issued in 2014 and effective from 2018. It covers recognition, measurement, impairment, derecognition and hedge accounting, and replaces IAS 39 and some previous versions of IFRS 9.
IAS 39 is a standard that sets out the accounting for financial instruments, including hedge accounting. It has been amended by IFRS 9, which replaces some of its requirements, but allows entities to choose between IAS 39 and IFRS 9 for hedge accounting.
IFRS 9 bases the classification of financial assets on the contractual cash flow characteristics and the entity’s business model for managing the financial asset, whereas IAS 39 bases the classification on specific definitions for each category.
In November 2009 the IASB issued IFRS 9 (2009), the first milestone in the project to replace IAS 39. This standard required the classification and measurement of financial assets into only two categories: amortised cost, and fair value through profit or loss (‘FVPL’).
IFRS 9 specifies how an entity should classify and measure financial assets, financial liabilities, and some contracts to buy or sell non-financial items. It replaces IAS 39 in its entirety, except for hedge accounting, which remains unchanged.
