COVID-19 Impact on IFRS 9 Expected Credit Losses

Existing ECL models use historic credit data to derive links between changes in economic conditions and customer behaviour, and other ECL parameters such as loss rates, probabilities of default and loss given default etc. COVID-19 conditions have significantly impaired these historic data tools such that businesses need to revisit their ECL models to make appropriate updates.

Summary impact of IFRS 9 on non-financial entities

  The new hedge accounting model under IFRS 9 will have a significant impact on non-financial entities. While the new hedge accounting model has a less cumbersome approach compared to IAS 39, it has significant disclosure requirements that will need close review by entities. In July 2014, the International Accounting Standards Board (IASB) promulgated the [...]