On 16th of December 2016 Baker Tilly Bishkek in collaboration with colleagues from Baker Tilly Russia and Baker Tilly Moldova held the round table on “IFRS 9 “Financial Instruments”. All interested specialists from banking industry were invited. During the round table the following issues were discussed: the main purpose of IFRS 9 and its differences from IAS 39; impairment models employed in IFRS 9; as well as necessary activities for successful transition to new standard.

As known, in July 2014 the International Accounting Standards Board issued the final version of IFRS 9 “Financial Instruments” were the changes in requirements of classification and valuation of financial instruments and accounting treatment of reserves were introduced.

IFRS 9 introduces model based on expected loan losses for the impairment of financial activities instead of model of incurred loan losses envisaged earlier by IAS 39 “Financial Instruments: recognition and valuation”. In accordance with IAS 39 the entities recognize expected loan losses and its adjustments on each reporting date, so recognizing the changes of credit risk from the date of initial recognition.

For the smooth transition to the new standard the period is required that will allow to adjust the methodology, policies and procedures of classification, accounting of financial instruments and valuation of reserves, to prepare the IT infrastructure and train the employees, to measure the influence of the results and to collect the missing data. Thus, the methodology and procedures of valuation of impairments in accordance with IFRS 9 should be prepared in advance.

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