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4 - AAU - Accounting and Financial Auditing

AAU 306 - International Financial Accounting Standard 9: Financial Instruments (IFRS 9)

Code Start Date Duration Venue
AAU 306 12 August 2024 5 Days Istanbul Registration Form Link
AAU 306 16 September 2024 5 Days Istanbul Registration Form Link
AAU 306 21 October 2024 5 Days Istanbul Registration Form Link
AAU 306 25 November 2024 5 Days Istanbul Registration Form Link
AAU 306 30 December 2024 5 Days Istanbul Registration Form Link
Please contact us for fees


Course Description

The course covers three core topics of IFRS 9. First two days is about the classification and measurement of financial instruments, the next two days is about the impairment model introduced in IFRS 9, and the final day deals with the hedge accounting model under IFRS 9. Contractual cash flow assessment and business model test are main concepts for classification of financial instruments under IFRS 9. Expected loss model replaces the “incurred loss” model for impairment. Finally, hedge accounting part provides a comprehensive view of the most important requirements for derivatives and hedging activities under IFRS 9. Hedge accounting is more aligned the risk management practices in the market.

Course Objectives

  • Providing a comprehensive view of the most important accounting and reporting requirements under IFRS 9
  • Enabling participants to assess the business and financial implications of adopting the new standard
  • Clarifying the financial instruments classification system of IFRS 9
  • Understanding the expected credit loss model under IFRS 9
  • Identifying important topics of the new hedge accounting framework

Who Should Attend?

  • Managers especially Audit Committee members, CFOs, and CROs
  • Credit risk managers
  • Risk management managers
  • Financial accountants
  • Internal and External Auditors 
  • Consultants

Course Details/Schedule

Day 1

  • Overview of IFRS 9 
  • Classification of Financial Assets 
  • Process for classification and measurement
  • Contractual cash flow assessment
  • The SPPI (solely payments of principal and interest) Test
  • The SPPI Test: Variable interest rate, Prepayment feature, and Term extension feature
  • The SPPI Test: De minimis and Not genuine, and Leverage
  • The SPPI Test: Non-recourse Assets
  • The SPPI Test: Contractually linked instruments
  • Modified Time Value of Money and Regulated Interest Rates

Day 2

  • Business Model Test
  • Hold to Collect Business Model
  • Hold to Collect and Sell Business Model (Hybrid Model)
  • Other Business Models – Fair Value Through Profit and Loss
  • Investments in Equity Instruments
  • Financial Liabilities 
  • Accounting Mismatch
  • Embedded Derivatives 
  • Reclassification 
  • Measurement 
  • Gains and Losses 

Day 3

  • Overview of the new impairment model
  • Recognition of impairment
  • Expected Credit Losses (ECL) Concept
  • ECL: Cash Flows
  • ECL: Determining Significant Increase in Credit Risk and Default
  • ECL: Stages (Stage 1, 2, and 3)
  • ECL Measurement: Instrument Basis vs. Collective Basis
  • Shared Credit Risk Characteristics
  • ECL Measurement: Discounting methods
  • ECL Measurement Simplification: Rebuttable Presumptions and Low Credit Risk Assumption

Day 4

  • ECL Measurement: Loan Commitments
  • ECL Measurement: Modified financial assets
  • ECL Measurement: Purchased or originated credit-impaired assets
  • ECL Measurement: Modelling Needs
  • Integration of Macro-economic forecasts and forward-looking information
  • ECL Measurement: Level of Sophistification
  • Simplified impairment model: Trade Receivables and Contract Assets, and Lease Receivables
  • Off-balance sheet financial items: Loan commitments, Financial Instruments with Undrawn Commitments, and Financial Guarantee Contracts
  • Comparision of Impairment under IAS 39 and IFRS 9

Day 5

  • Hedge Accounting under IFRS 9
  • Qualifying criteria and effectiveness testing
  • Hedged items
  • Aggregated exposures: Combination of a derivative item and a non-derivative item
  • Hedging instruments: Options, Zero Cost Collars, Forward Contracts, Foreign currency swaps,and basis spread
  • Comparision of Hedge Accounting under IAS 39 and IFRS 9