The Implications of IFRS9 on the Investment Funds Industry - Part 2

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IFRS 9, Financial Instruments, is the IASB’s replacement of the current IAS 39 Financial Instruments: Recognition and Measurement and shall become effective as of 1st January 2018. While IFRS 9 contains many positive evolutions, it affects more than just financial institutions. Any Collective Investment Scheme could have significant changes to its financial reporting as a result of the implementation of this standard. The adoption of IFRS 9 will have an impact on the classification, measurement and impairment of assets of Collective Investment schemes, such as investments in debt securities and equity instruments. Under IFRS 9 there are two measurement models: amortised cost and fair value.

In the case of Sicavs, most equity and debt instruments are measured at fair value, with changes in fair value recognised in profit and loss as they arise. However there are assets which are measured at amortised cost, and the adoption of IFRS 9 will mainly impact such assets, mainly through the...

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