HKFRS 9 Financial Instruments

Technical Resources

This webpage contains pronouncements, guides and articles that are relevant to
HKFRS 9 Financial Instruments.

Effective Date

Financial periods beginning on or after 1 January 2018.

Affected standards

Supersedes HKAS 39 Financial Instruments: Recognition and Measurement.

Why do we need a new standard

HKFRS/IFRS 9 was developed to make financial reporting for financial instruments more relevant and understandable. The reforms introduced by HKFRS 9 are consistent with requests from the G20, the Financial Stability Board and Others.

HKFRS 9 brings together the classification and measurement,impairment and hedge accounting phases of the IASB’s project to replace HKAS 39 Financial Instruments: Recognition and Measurement.

HKFRS 9 is built on a logical, single classification and measurement approach for financial assets that reflects the business model in which they are managed and their cash flow characteristics.

Built upon this is a forward-looking expected credit loss model that will result in more timely recognition of loan losses and is a single model that is applicable to all financial instruments subject to impairment accounting.

In addition, HKFRS 9 addresses the so-called ‘own credit’ issue, whereby banks and others book gains through profit or loss as a result of the value of their own debt falling
due to a decrease in credit worthiness when they have elected to measure that debt at fair value.

HKFRS 9 also includes an improved hedge accounting model to better link the economics of risk management with its accounting treatment.

Frequently used resources