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IFRS 9 - Are you ready?

IFRS 9 is the biggest accounting change, replacing IAS 39 that we have seen since the adoption of IFRSs.

On July 24, 2014 the IASB published the complete version of IFRS 9 Financial Instruments, which replaces most of the guidance in IAS 39. This includes amended guidance for the classification and measurement of financial assets by introducing a fair value through other comprehensive income category for certain debt instruments. It also contains a new impairment model which will result in earlier recognition of losses. IFRS 9 will be effective for annual periods beginning on or after January 1, 2018, subject to endorsement in certain territories.

Helping Clients

  • Technical accounting
  • Modelling capability
  • Implementation (data, systems and people) 

Am I affected?

This standard will be very challenging to apply, in particular for financial institutions.

IFRS 9 applies to all entities. However, financial institutions and other entities with large portfolios of financial assets measured at amortised cost or FVOCI will be the most effected and in particular, by the ECL model. Management will need to build new models to determine both 12-month and lifetime ECL. This will require complex judgements (for example, definition of default, definition of low credit risk and behavioural life of revolving credit facilities).

It is critical that these entities assess the implications of the new standard as soon as possible. It is expected that the implementation of the new ECL model will be challenging and might involve significant modifications to credit management systems.

Contact us

Stelios Constantinou

Partner, Assurance, In charge of Financial Services, PwC Cyprus

Tel: +357-25555190

Vassilios Vrachimis

Partner, Advisory, In charge of Banking, PwC Cyprus

Tel: +357-22555128

Anna Loizou

Partner - Assurance, Head of People, PwC Cyprus

Tel: +357-25555166

Nicos Stavrou

Director, Assurance

Tel: +357-22555000

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