SARB Issues Directive for Classification of Impairments under IFRS 9
SARB issued a directive (D5/2017) for banks and bank auditors on the classification of impairments as either general or specific under IFRS 9. This applies in the context of the interim approach, the transitional arrangements of the ECL accounting provisions for regulatory capital purposes, the disclosure requirements relating to such transitional arrangements, and the requirements for the auditing of balances and adjustments that shall be implemented once IFRS 9 becomes effective.
IFRS 9 represents a fundamental change in accounting for financial instruments and will have a significant impact on how banks are required to determine impairments. IASB issued IFRS 9 in July 2014 and it will become effective on January 01, 2018. Banks, branches of foreign institutions and controlling companies will have to report in terms of the new requirements for financial years starting on or after that date. IFRS 9 replaces IAS 39.
Related Link: SARB Directive D5/2017 (PDF)
Keywords: Middle East and Africa, South Africa, Banking, Accounting, IFRS 9, Classification of Impairments, ECL, SARB
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