In the first decade of new millennium the world witnessed unprecedented global financial crisis with severe adverse impact on many economies. Unlike previous crisis, large internationally active Banks from advanced economies were at the epicentre of the crisis. The crisis impact was felt across the globe, calling for urgent and unified remedial action by global leaders and international forums such as G20, Financial Stability Board, and Basel Committee on Banking Supervision. Financial Reporting Standards area was no exception and the financial instruments related standards of both IFRS Framework and US GAAP faced severe criticism from various corners. It was time for both the International Accounting Standard Board (IASB) and Financial Accounting Standard Board (FASB) to work on war footing basis to undertake complete overhaul of standards on Financial Instruments. In respect of IFRS standards, extensive time bound work of over more than 5 years culminated into issuance of a robust standard internationally viz. IFRS 9, Financial Instrument or its equivalent standards in various jurisdictions.

As it was reported widely, transition to IFRS 9 was a monumental change which requires galvanisation of entire organisation and substantial cost and efforts. Well, it is expected that benefits of change that will be bought in by IFRS 9, will be far greater than the efforts and resources employed in successfully managing this huge transformation.

In this overall context of global change, the ICAI undertook a project to evaluate the impact of worldwide implementation of IFRS 9, so that this impact study would provide valuable insights of these financial reporting reforms and also act as a guiding factor for banks and jurisdictions that will be transitioning to IFRS 9 or equivalent in the near future. With this thought process, ICAI came out with publication on IFRS 9 Transition Impact on Banks across the Globe. The study is comprehensive one covering 75 banks from 26 global jurisdictions. The study reflects that Prudential Regulators of various jurisdictions were proactive and highly supportive of embracing this change.

Download IFRS 9: Financial Instruments – A Study: Transition Impact on Banks Across the Globe


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June 2021