IFRS 9:Financial Instruments—An Overview

Abstract

IFRS 9 issued by IASB with a view to simplify the process and accounting of Financial Instruments by replacing present IAS 39 (Financial Instruments Recognition and Measurement). However, as of now, IFRS 9 reads only about Financial Assets (FA). Guidelines about Financial liabilities and Fair valuation are still to come under Phase II of the standard. In FA itself the standard recommended for major changes about classification and categorization by bringing the concept of 'Business Model Test'. Once adopted in full, this standard has a long lasting impact on the accounting world, particularly for Financial and Banking industries.