IFRS 9 – Impairment of financial instruments

Martin Svitek

The training is focused on a comprehensive explanation of the IFRS 9 model for impairment of financial instruments which is based on expected credit losses. It describes requirements for assessment of significant credit risk deterioration as a distinguishing factor for booking the impairment based on 12-month or lifetime expected credit losses. Much space is dedicated to models for measuring the expected credit losses. Also special areas of impairment such as POCI, modifications of financial assets and disclosure requirements are explained.

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Obsah školenia: IFRS 9 – Impairment of financial instruments

  • Scope of impairment requirements
  • General overview of the requirements – depiction of 3 stages 
  • Criterion of significant increase in credit risk + detailed description of assessment principles, individual vs collective assessment and practical expedients
  • Requirements for measurement of 12-month and lifetime expected losses + explanation of models commonly used in practice 
  • Application to off-balance sheet exposures – loan commitments and financial guarantees
  • Specific requirements for revolving credit facilities
  • Forward looking adjustments of expected credit losses
  • Credit impaired financial assets - Stage 3
  • Modifications of cash flows (restructurings)
  • Application to financial assets measured at fair value through OCI 
  • Accounting for reclassifications and related changes in impairment 
  • Exceptions from the general model – recognition of lifetime expected losses from inception for specific types of assets, 
  • Special requirements for purchased or originated credit impaired (POCI) assets and interactions with derecognition requirements
  • Requirements for presentation in the financial statements
  • Detailed requirements for disclosures of expected credit losses including disclosure examples
  • Outcomes of discussions by ITG (Impairment Transition Resource Group) organised by the IASB
  • Practical application issues – calculation of PDs, LGDs, EADs, discount factors, adjustments of values used for regulatory purposes, derivation of long-term PDs based on short-term period observations + calculation examples

Discussion of implementation issues

After completing the training the participants will understand 

  • assessment of significant increases of credit risk which distinguishes whether the impairment is measured based on 12-month or lifetime expected credit losses
  • measurement of the expected credit losses including models commonly used in practice
  • special areas of impairment requirements such as POCI, modification of financial assets including leeway to affect the extent of POCI in the balance sheet – specific rules applicable to revolving facilities 
  • disclosures of credit risk for financial instruments based on practical examples

Target audience

  • At banks and other financial institutions mainly employees at following departments: accounting, reporting, risk management, treasury, ALM, controlling, internal audit, financial analyses of IFRS statements of customers 
  • At non-financial companies mainly employees at following departments: accounting, reporting, risk management, controlling, internal audit   
  • Audit firms 
  • Supervisors and enforcers in the area of financial institutions accounting

Harmonogram školenia: IFRS 9 – Impairment of financial instruments

08:30 – 09:00 registrácia účastníkov
09:00 – 10:30 prednáška
10:30 – 10:45 prestáva
10:45 – 12:00 prednáška
12:00 – 13:00 obed
13:00 – 13:50 prednáška
13:50 – 14:00 prestáva
14:00 – 16:00 prednáška a diskusia

Lektor školenia: IFRS 9 – Impairment of financial instruments

Martin Svitek

Martin Svitek graduated from University of Economics in Bratislava, Slovakia in 1999. He continued with postgraduate study during which he was teaching courses on accounting in banking and finance. In 2004 he switched to banking practice and has been working as an IFRS expert since. His main focus are financial instruments. Most of the time he has…

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