Institute of Chartered Accountants of Pakistan (ICAP) organised a seminar on "New Accounting Model for Financial Instruments under IFRS 9" at ICAP House here. The speakers were Arslan Khalid, Partner Assurance, Ernst &Young Ford Rhodes Sidat Hyder, Syed Asad Ali Shah, Managing Partner and M. Yousuf Adil Saleem & Co Chartered Accountants.
The speakers highlighted the reasons for replacement of IAS-39 with this new Standard. They said the standard became highly popular due to its complexity particularly during the global financial crisis. They informed that during the development of IFRS-9, the IASB was faced with a challenge to reduce complexity of IAS-39 and at the same time maintain a technically sound basis for the standard.
They cited that the IASB recognised the potential practical difficulties in implementing the Expected Loss Model (ELM) particularly the estimation of expected credit losses over the life of the financial assets They further said that as the world economies recover from the financial crisis, the widespread criticism on the accounting standards during the crisis period appears to drive the future shape of significant accounting pronouncements and the IAS 39 that was extensively debated for its over-complexity and internal inconsistencies during the financial crisis is under complete overhaul by the International Accounting Standards Board (IASB). The speakers said the new accounting model for the classification and measurement of financial instruments as prescribed under IFRS 9 and its likely impact on businesses. A large number of professionals were present on the occasion.
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