Financial instruments accounting continues to respond and adapt to the changing circumstances of the global economy. The COVID-19 coronavirus pandemic has had far reaching implications for the capital markets whilst issues such as benchmark reform, and standard setting in relation to financial instruments with characteristics of equity, have the potential to affect corporates and banks alike. In addition many organisations continue to grapple with the 2018 implementation of AASB 9.
As financial products continue to evolve, together with changes in economic conditions and regulations, organisations will continue to face challenges in accounting for financial instruments.
The suite of financial instruments accounting standards principally comprises AASB 9 Financial Instruments, AASB 132 Financial Instruments: Presentations, AASB 7 Financial Instruments: Disclosures and, in some instances, AASB 139 Financial Instruments: Recognition and Measurement. The introduction of AASB 9 in 2018 introduced a new framework for financial instruments accounting which many organisations continue to grapple with, however, what hasn’t changed is that the substance and contractual terms of an arrangement play an important part in the financial reporting of an organisation’s financial arrangements.
Whether it is dealing with the classification of funding as debt or equity, accounting for sales of financial assets, modification of debt arrangements, hedge accounting or impairment, accounting for financial instruments is a nuanced affair. Our insights will help you understand the requirements of this standard as they relate to your company, as well as offering insights and guidance on the application of IFRS® Standards.
Financial Instruments Q&A series
We provide answers to common questions on the application of accounting standard AASB 9 Financial Instruments.
- How does a borrower account for a waiver of loan repayments?
- How does a borrower account for loan repayment holidays obtained during the COVID-19 pandemic?
- When do loan modifications result in derecognition?
- How does a borrower account for a modification to a prepayable fixed rate loan?
- What is the impact of modifying a floating rate loan?
Reporting Updates are KPMG's way of communicating changes occurring within the Australian financial reporting environment to our clients.
KPMG communicates changes occurring in the Australian financial reporting environment.
We provide a range of services to help you with these complexities and more, including:
- supporting your transition into BAU
- accounting advice – including ‘on call’ services
- documentation of hedge accounting relationships and ongoing monitoring of compliance
- process and IT system change solutions
- industry, regulator’s insights and analysis around disclosures
Deep banking sector knowledge and a highly experienced team combine to assist clients navigate the complex challenges of today and into the future.
We help clients to navigate the complex challenges facing the banking industry.