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  1. Pursuant to ASC 230-10-50-1, a reporting entity must disclose its definition of cash equivalents. Any subsequent change in the definition is a change in accounting principle, requiring retrospective presentation in prior years and a determination that such change is preferable.

    • FSP 6-4

      To illustrate how operating cash flows (prepared on the cash...

  2. IFRS 9 affects all types of entities. Certain requirements, especially the introduction of the new expected loss impairment model for large portfolios, will require a great deal of effort. The new hedge accounting rules offer attractive simplified approaches and new options for industrial companies.

  3. Jul 13, 2020 · Theoretically you do have to calculate ECL on cash and cash equivalents, but in practice you may choose not to because the impact should be immaterial (a characteristic of a C&CE is that it should be subject to insignificant changes in value, and that includes credit risk).

    • How will this publication help you?
    • Classification and measurement
    • Financial liabilities designated as at FVTPL
    • Investments in equity instruments designated as at FVOCI
    • Reclassifications of financial assets
    • Other disclosures
    • Impairment
    • Credit risk management practices
    • ECL calculations
    • Amounts arising from ECL
    • Collateral
    • Written-off assets
    • POCI assets
    • Credit risk exposure
    • − how hedging activities might affect the amount, timing and uncertainty of future cash flows; and
    • Risk management strategy
    • Amount, timing and uncertainty of future cash flows
    • at FVTPL

    The objective of the disclosure requirements is for an entity to disclose information to enable users of financial statements to evaluate: − the significance of financial instruments for the entity’s financial position and performance; − the nature and extent of risks arising from those financial instruments, both during the period and at the repor...

    Disclose the carrying amounts for: − financial assets measured at fair value through profit or loss (FVTPL), distinguishing between those designated into that category and those mandatorily measured at FVTPL. − financial liabilities measured at fair value through profit or loss (FVTPL), distinguishing between those designated into that category and...

    If an entity is required to present the effects of changes in that financial liability’s credit risk in other comprehensive income (OCI), then disclose: − any transfers of the cumulative gain or loss within equity during the period, including the reason for the transfer; and − if the liability is derecognised during the period, then the amount (if ...

    Disclose: − which investments in equity instruments have been designated as at FVOCI; − the reasons for the designation; − the fair value of each investment at the reporting date; − dividends recognised during the period, separately for investments derecognised during the reporting period and those held at the reporting date; and − any transfers of...

    For all reclassifications of financial assets in the current or previous reporting period, disclose: − the date of reclassification; − a detailed explanation of the change in the business model and a qualitative description of its effect on the financial statements; and − the amount reclassified into and out of each category. Note that these disclo...

    For items of income and expense and gains or losses, provide: − an analysis of the gain or loss recognised in the statement of profit or loss and OCI arising from the derecognition of financial assets measured at amortised cost, showing separately gains and losses arising from derecognition of those financial assets; and − the reasons for derecogni...

    New disclosure requirements apply about the credit risk of financial instruments (and contract assets in the scope of IFRS 15 Revenue from Contracts with Customers) to which IFRS 9’s impairment model is applied. These disclosures should be suficient for a user to understand the effect of credit risk on the amount, timing and uncertainty of future c...

    Explain credit risk management practices and how they relate to the recognition and measurement of ECL such that a financial statement user can understand and evaluate: − how the entity determines whether the credit risk of financial instruments has increased significantly since initial recognition, including whether and how: financial instruments ...

    Explain the basis of the inputs, assumptions and the estimation techniques used when: − estimating 12-month and lifetime ECL; − determining whether the credit risk of financial instruments has increased significantly since initial recognition; and − determining whether financial assets are credit-impaired. Explain also: − how forward-looking inform...

    Provide a reconciliation for each class of financial instrument of the opening balance to the closing balance of the impairment loss allowance. The reconciliation is given separately for loss allowances against financial assets and for provisions, unless presented together and shows the changes during the period for: − instruments for which 12-mont...

    For financial instruments that are subject to the impairment requirements of IFRS 9, disclose for each class of financial instrument: − the amount that best represents the entity’s maximum exposure to credit risk at the reporting date, without taking account of any collateral held or other credit enhancements; − except for lease receivables, a narr...

    Disclose the contractual amount outstanding of financial assets written off during the reporting period that are still subject to enforcement activity.

    Disclose the total amount of undiscounted ECL at initial recognition on financial assets initially recognised during the reporting period.

    Disclose, by credit risk rating grades (or by past-due status if the entity uses only past-due information to assess significant increases in credit risk): − the gross carrying amount of financial assets; and − the exposure to credit risk on loan commitments and financial guarantee contracts. This information is disclosed separately for: − financia...

    − the effect that hedge accounting has had on financial position and performance.

    Explain the risk management strategy for each risk category of risk exposures for which hedge accounting is applied. As a minimum, the disclosures provided should describe: − the hedging instruments and how they are used to hedge risk exposures; − how the entity determines the economic relationship between the hedged item and the hedging instrument...

    Disclose, by risk category, quantitative information that allows financial statement users to evaluate the terms and conditions of hedging instruments and how they affect the amount, timing and uncertainty of future cash flows – i.e: − a profile of the timing of the nominal amount of the hedging instrument; and − if applicable, the average price or...

    If a financial instrument, or a proportion of it, is designated as at FVTPL because a credit derivative is used to manage the credit risk of that instrument, then disclose: − a reconciliation of each of the nominal amount and the fair value at the beginning and end of the period of the credit derivatives that have been used to manage the credit ris...

  4. www.bdo.global › getmedia › 019a82c6/9901/4f17-9c71IFRS IN PRACTICE - BDO Global

    Restricted cash and cash equivalent balances – disclosure requirements. 3.1. Interaction with IAS 1. Classification of cash flows as operating, investing or financing. 4.1. Operating activities. 4.2. Investing activities. 4.3. Financing activities. 4.3.1. Disclosure of changes in liabilities arising. from financing activities.

  5. It is intended to help banks implement IFRS 9, by guiding them through the decision-making process needed to prepare the required disclosures. This guide is not intended to be seen as a complete and exhaustive summary of all disclosure requirements under IFRS.

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  7. Disclosures. Extensive disclosures are required, including reconciliations from opening to closing amounts of the ECL provision, assumptions and inputs and a reconciliation on transition of the original classification categories under IAS 39 to the new classification categories in IFRS. 9.

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