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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.