ICAEW publishes guide to IFRS 9 and COVID-19
20 April 2020: ICAEW’s Financial Services Faculty has published a guide to help banks and their auditors deal with the effects of coronavirus on financial reporting under IFRS 9 Financial Instruments.
The guide sets out considerations to help readers deal with three fundamental areas of the standard affected by the economic consequences of coronavirus:
- Forecasting and multiple economic scenarios
- Significant increase in credit risk
- Reporting and disclosure
The areas outlined will be useful considerations for finance teams, auditors and audit committees in seeking to ensure they are applying IFRS 9 to properly reflect the situation created by Covid-19 and subsequent financial support measures for individuals and businesses.
This includes forming a view on the shape of recovery and the relative severity of different potential economic scenarios and what approach may be taken in the absence of a central scenario.
The guide also draws together statements from the International Accounting Standards Board, European Securities and Markets Authority and the Basel Committee on Banking Supervision.
A full version of the guide can be found here.