A Study On The Impact Of IFRS 9:Classification And Measurement On China's Banks

With development of market and innovation of financial product,how to represent related information of financial assets precisely has always been the most concerned issue of theory and practice.IAS 39 has drawbacks that classification is based on intention of management and its framework is generally rule-based.The newly released IFRS 9 which replaces IAS 39 has reduced the number of categories from four to three,and expands measurement on fair value,only keeping one cost measurement category.IFRS 9 improves the IAS 39 in many ways:it has reduced the categories and provides a less sophisticated and more logical framework,which has improved the understandability of classification and measurement;otherwise,it has introduced business model and contractual cash flow characteristics,and provides users with more useful and relevant information on financial assets.This study,based on domestic and foreign literature review,has used case study method to analyze the impact IFRS 9 has brought on China Merchant Bank.Firstly,the Part III is about the difference between IAS 39 and IFRS 9.Then,the Part IV the case study on how IFRS 9:Financial assets classification and measurement affects the information represented through the financial report of China Merchant Bank.Lastly,the case study would analyze the influence on CMB's operation including risk control and income.In conclusion,IFRS 9 has solved problems that classification on intention under IAS 39,and has removed AFS residual category and tainting rule.IFRS 9 will have impact on CMB's financial assets classification and measurement,it will reduce categories and expand fair value measurement.The bank's management need to take several countermeasures to deal with the impact.