BDO submits comment letter to the IASB on RFI on PIR of IFRS 9 Financial Instruments - Impairment
BDO submits comment letter to the IASB on RFI on PIR of IFRS 9 Financial Instruments - Impairment
BDO has submitted a comment letter in response to the Post-implementation Review Request for Information issued by the IASB on IFRS 9 Financial Instruments – Impairment.
While BDO believes that IFRS 9 Financial Instruments overall has resulted in more timely recognition of the credit losses with entities providing more useful information to the users of the financial statements, BDO has expressed certain concerns in some areas. One of these includes a diversity in practice noted, with a consequential effect on ECL calculations, in modification of liabilities particularly in cases where lending arrangements are modified leading to modification of assets recognised. Although IFRS 9 contains requirements for modified financial liabilities, it does not contain specific requirements for whether a modified financial asset continues to be recognised, or is derecognised with a new financial asset being recognised. Amongst others, BDO also noted that IFRS 7 Financial Instruments: Disclosure does not contain explicit requirements for credit risk sensitivity disclosures and propose that consideration is given to how these could be incorporated.
The Request for Information and BDO’s comment letter may be accessed here.
While BDO believes that IFRS 9 Financial Instruments overall has resulted in more timely recognition of the credit losses with entities providing more useful information to the users of the financial statements, BDO has expressed certain concerns in some areas. One of these includes a diversity in practice noted, with a consequential effect on ECL calculations, in modification of liabilities particularly in cases where lending arrangements are modified leading to modification of assets recognised. Although IFRS 9 contains requirements for modified financial liabilities, it does not contain specific requirements for whether a modified financial asset continues to be recognised, or is derecognised with a new financial asset being recognised. Amongst others, BDO also noted that IFRS 7 Financial Instruments: Disclosure does not contain explicit requirements for credit risk sensitivity disclosures and propose that consideration is given to how these could be incorporated.
The Request for Information and BDO’s comment letter may be accessed here.