IFRS 9 & Expected Credit Loss

Course Overview

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This course provides an in-depth analysis, application methodology and strategy for implementing IFRS 9 on financial instruments, including hedge accounting and the treatment for expected credit loss.

Delegates will focus on implementation issues and challenges and discuss case studies on practical application of the standard. You will have an understanding on “what was” and “what will be” in the world of accounting for financial instruments.

Key Learning Outcomes

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By the end of this interactive course, the attendees will:

• Learn how to implement the financial reporting standards on financial instruments – IFRS 9;
• Understand the classification and measurement methodology for financial assets and financial liabilities;
• Comprehend the expected credit loss model and how to implement it in your organization;
• Grasp the concept of hedge accounting;
• Identify the changes and their impact on financial statements;
• Develop a plan to move to the updated standard;
• Have an understanding of IFRS 9 ECL requirements;
• Have an understanding of methodologies other than PD/LGD and their applicability for the purposes of determining the loan loss provisions under IFRS 9;
• Have an understanding of how to apply these methodologies to portfolios of financial assets using excel;
• How to document and control the use of such methodologies.

Target Audience

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• Financial and management accountants in corporate and financial institutions
• Staff in treasury, operations, risk management, IT or compliance departments
• Internal auditors of entities reporting under IFRSs
• External auditors with clients facing the complexities and challenges in adopting and implementing IFRS 9
• Staff and management of Central Banks, Deposit Insurance Entities, and other agencies with regulatory responsibility in the financial services sector
• Financial analysts seeking to improve their understanding of the accounting and disclosures related to financial instruments and the changes introduced by IFRS 9
• Professors and other instructors with educational facilities
• First-time adopters of IFRSs, seeking to analyze the implications of applying IFRS 9 initially

Course Detailed Outline

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Module One: Overview of the impairment requirements in IFRS 9 how are they different from IAS 39.

• Why the requirements are different and what are they trying to achieve;
• Objectives of ECL measurement under IFRS 9.

Module Two: Step 1 – Creating portfolios with similar credit risk characteristics

• IFRS 9 requirements;
• How to define similar credit risk characteristics;
• Policies and controls needed to implement the above.

Module Three: Step 2 – Policies for determining Staging of Financial  assets

• IFRS 9 requirements;
• What measure of credit risk to use for determining staging;
• Policies and controls for Staging.

Module Four: Step 3 – Determining the Base Case Measure of Credit Risk

• IFRS 9 requirements;
• Determining Life Time measure of credit risk using loss rates and weighted average residual maturity incorporating forward looking information;
• Determining 12 month measure of credit risk using loss rates and weighted average residual maturity incorporating forward looking information;
• How to adjust loss rates to determine credit risk without impact of collateral;
• How does the above method compare with PD / LGD methodology;
• When is it appropriate to use the above methodology;
• Policies and controls pertaining to the determination of the above measures.

Module Five: Step 4 – Multiple Scenarios

• When do we need to consider multiple scenarios.
• How to adjust Base Case Measures of Credit Risk using multiple scenarios;
• How to use past data to calibrate such measures;
• Policies and controls pertaining to the determination of the above measures.

Module Six: – Bringing it all together – arriving at the provision for Expected Credit Losses under IFRS 9.

Module Seven: Demonstration of transfer of financial assets from Stage 1 to Stage 2.

Module Eight: A brief look at the disclosure requirements.

Wrap UP

Methods of Delivery

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• This training course will combine:

• Presentations with instructor-guided interactive discussions between participants relating to their individual interests.
• Practical exercises,
• Video material case studies,
• Presentations and group discussion in an active and participative way supported by reading and reference materials.

• All participants receive a comprehensive binder containing copies of the presentation slides, handouts and other course material.

Course Details

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Course Date: 25-26 November 2020

Number of  Days: 2 Days

Timing: 5:00 PM- 9:00 PM

Language of the Course and Material: English

Venue: Hotel Venue/ Virtual Training

Registration

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