To reduce the environmental impact and contribute to sustainability efforts, ISCA will contribute our part by eliminating the printing of course materials for selected courses with effect from 2023. Tips: To make your paperless learning experience more enjoyable, you may bring along a digital device such as a Windows based laptops or tablets to read your online materials during the class. QR code will be provided in the class for you to download the materials in PDF. Join us and be a Difference Maker!

 

Introduction
IFRS 9/FRS 109 is the new Standard to replace IAS39/FRS39 (old standards) for annual periods beginning on or after 1 January 2018. The new Standard uses a highly structured format consisting of seven chapters dealing with specific issues in the accounting for financial instruments. Many of the chapters in the new Standards carryforward the principles contained in the old Standards, notably the objectives, scope, recognition and derecognition of financial assets and liabilities. On the other hand, the new Standards also made significant changes by introducing a logical, single classification and measurement approach for financial assets that reflects the business in which they are managed and their cash flow characteristics. Impairment of financial assets is built on a forward-looking expected credit loss model instead of the existing ‘incurred model’. The new impairment model will result in more timely recognition of loan losses and is a single model that is applicable to all financial instruments subject to impairment provision. The new Standards also improved the hedge accounting model to better link the economic of risk management with its accounting treatment.
 
 
Programme Objectives
This one-day course provides a practical guide on applying the principles of the new Standard and examines the technical changes from the existing practice under the old Standards to the impending new Standard.
This course provides an understanding on the following issues:

• To highlight the similarity and salient difference between old Standard and the new Standard:
  • How financial assets and financial liabilities are recognition and derecognition
  • How to classification of financial assets and financial liabilities
  • The measurement issues and accounting models:
    • Fair value through profit or loss
    • Fair value through other comprehensive income
    • Amortised cost method
  • Impairment of financial assets:
    • Comparing the ‘incurred loss model’ with the ‘expected loss model’
    • The accounting requirements for loan losses and interest income
  • A quick comparison of hedge accounting under the old Standards and the new Standard
• An examination of the transiting provisions in the new Standard

Programme Outline

Chapter 1 Objectives

• A quick brief on the objectives of accounting for financial instruments

 
Chapter 2 Scope

• How to handle subsidiaries, associates and jointly controlled entities
• Leases: lesser and lessee scope
• Issuer of equity instruments
• Insurance contracts Vs. Financial guarantee contracts
• Contract in business combination
• Loan commitments
• Provisions
• Share-based-payments
• Contract to buy or sell non-financial items
• Commodity derivative contracts to be settled net in cash Vs. physical delivery

 
Chapter 3 Recognition and Derecognition

• Recognition of financial assets and financial liabilities
  • Financial guarantee contracts
  • Regular way purchase and sale of financial assets
• Derecognition of financial assets and financial liabilities
  • Evaluating the conditions for derecognising financial assets and financial liabilities
  • Evaluating transfer of a financial asset that qualify for derecognition
  • Identifying modification of substantial terms that trigger the derecognition of a financial liability

 
Chapter 4 Classification

• Changing the mindset on classification and reclassification of financial assets and financial liabilities
• How to determine ‘business model’ and the ‘contractual cash flows’
• When to apply fair value option
• A brief on accounting for holders of embedded derivatives

 
Chapter 5 Measurement:

• Examine the measurement methods and accounting models for:
  • Amortised cost method
  • Fair value through profit or loss method
  • Fair value through other comprehensive income method
• Impairment of financial assets:
  • Transition from ‘incurred loss model’ to the ‘expected loss model’
  • How to identify expected credit loss
  • Applying the effective interest method after recognition of impairment losses

 
Chapter 6 Hedge Accounting

• Overview of accounting for the three types of hedges (cash flow, fair value, and net investment)
• Hedge accounting documentation requirements

 
Chapter 7 Effective Date and Transition

• How to transit from the old Standard to the new Standard

 
Training Methodology
Lecture style, with practical illustrations, technical flow-charts, conceptual “mind maps” and interactive discussions.
 
Closing Date for Registration
1 week before programme or until full enrolment

Intended For

This programme is suitable for all Finance Professionals, Audit Professionals, Members of Audit Committee, Finance Directors and Regulators. Those who are keen on attending a practical course that can comprehensively cover the new principles for accounting for financial instruments, as well as a discussion on the potential changes and updates on the current Generally Accepted Accounting Practice are welcome to attend.

Programme Facilitator(s)