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18 Feb. 2015

IFRS Transition Resource Group for Impairment of Financial Instruments (ITG)

IFRS 9 Financial Instruments (2014) is now complete and with it comes a new impairment model. The new model, which is a ‘three-stage model’, is fundamentally different from the ‘incurred loss’ model in IAS 39 Financial Instruments: Recognition and Measurement, as it is aimed at capturing expected credit losses before the event that gives rise to credit impairment occurs.

Implementation of the new impairment model may pose some challenges, for example in relation to application of the transitional requirements and assessment of significant increase in credit risk. To help entities deal with their implementation issues, the IASB has formed the IFRS Transition Resource Group for Impairment of Financial Instruments (ITG) to provide support in the form of a public discussion forum.

The first meeting of the ITG is on 22 April 2015 and the AASB encourages Australian entities that have implementation issues with the new impairment model to write to the ITG. The AASB can assist entities to articulate their issues to the ITG and facilitate discussions between the entities and the IASB.

Please contact Kala Kandiah (kkandiah@aasb.gov.au) or David Ji (dji@aasb.gov.au) at the AASB if you have any questions on the above.