IFRS 9 Financial Instruments vs IAS 139 Financial Instruments

Running head: ACCOUNTING AND FINANCE
Accounting and finance
Name of the Student:
Name of the University:
Author’s Note:

1ACCOUNTING AND FINANCE
Table of Contents
Introduction:....................................................................................................................................2
Discussion:.......................................................................................................................................2
Differences between the IFRS 9 Financial instruments and IAS 139 financial instruments:.........2
Evaluation of changes in the standard for reporting of financial instruments:................................2
Conclusion:......................................................................................................................................2
References list:.................................................................................................................................2

2ACCOUNTING AND FINANCE
Introduction:
The report elucidates research on accounting standard IFRS 9 Financial instruments that
was issued on 24th July, 2014 which is mandatorily effective for period beginning on or after 1st
January, 2018. This particular standard is applicable to impairment, recognition and
measurement, general hedge accounting and derecognition. As per this standard, reporting entity
is required to perform the recognition of financial liabilities and assets in the statement of
financial position, when it is involved in contractual provisions (Ramirez 2015). Measurement of
financial assets and financial liabilities is done at its fair value minus and plus when it is
recognized initially. However, when such financial assets and financial liabilities are not
recognized at fair value by way of loss and profit, issuing of such assets and liabilities
incorporates the transaction cost. Implementation of such standard is meant to respond to several
critics faced by IAS 139. Applicability of IAS 139 was not consistent with the way business
manages risks and business and it was way too complex which made IASB to reconsider IAS
139 (Chawla et al. 2016).
Discussion:
Differences between the IFRS 9 Financial instruments and IAS 139 financial instruments:
Introduction of IFRS 139 incorporates revised guidance on measurement and
categorization of financial assets and the project of introduction of this standard were divided in
to three phases. These phases include measurement and classification of financial assets and
liabilities, accounting hedge and impairment. The accounting for financial assets has simplified