The Influence And Application Of IFRS9:Financial Instruments In Commercial Banks

Financial instruments have been the issues of concern in accounting practice and theory.IAS39 has been criticized for its complexity and difficulty to understand.In July 2014,IFRS9 was promulgated,which made great improvements in classification and measurement of financial instruments,impairment of financial assets,and general hedge accounting.This paper makes interpretation and evaluation of IFRS9,and compares IFRS9 with IAS39.This paper then discuss the overall impact on commercial banks,and takes bank X as an example to discuss the application of IFRS9 in our country's commercial banks.At last,this paper puts forward suggestions for China's commercial banks and standard setting bodies.Research shows that,the new classification and measurement method provides a clear thinking and reduces the space of earnings management.Expected loss model is more forward-looking and reflects the concept of financial risk control,and make financial assets more clearly reflected in the statements.But the complexity increases workload and difficulty of the entity,and also reduces the comparability.IFRS9 adopted principle-based guidance for hedge accounting.It makes financial report and risk management link more closely.The case of bank X shows that,IFRS9 will have an impact on commercial banks and will face great challenges in the practical application.As a result,China's commercial banks should evaluate and measure the impact as early as possible,improve risk management and financial accounting system,set up internal process guidance and strengthen internal control and supervision.The standard-setting institutions in China should achieve convergence cautiously,provide more operational implementation guide,and improve the coordination of accounting standards and financial supervision,and provide personnel training and guidance.