ACCOUNTING

lOMoARcPSD|8949379




IFRS 9 Notes


Financial accounting 300 (University of Pretoria)




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 Standard focuses on recognition and measurement of financial instruments
 Refers only to financial assets & financial liabilities :. no equity instruments




1. Introduction:

 Financial assets & financial liabilities initially recognised at:
Fair Value + or – transaction costs
 If FairV through P/L then initially recognised only at:
Fair Value (no tx costs)
 Tx costs excl. admin, holding, finance, debt premiums & discounts
 If financial asset is “Trade Debtors” and it doesn’t have a significant financing component →
recognised at tx price (see par 5.1.3)
 Financial Assets: fair value determined at trade date
 Difference between fairV and tx price = day 1 gain/loss
 If an upfront fee is paid, the financial asset/financial liability initially recognised is ↓ed




2. Financial Liabilities:
 Classifications: (2)
o Amortised cost (automatic designation) → not held for trading
o FairV through Profit or Loss →
 held for trading; or
 designated on initial recognition

a. Amortised Cost

Steps:

 Calc fairV & recognize day 1 gain/loss (if necessary)
 Calc effective “i”
 Pmts comprise:
o increase in liability
o interest expense




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