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IFRS 9 impairment

IFRS 9, introduced by the IASB, replaced the "incurred loss" model of IAS 39 with a forward-looking Expected Credit Loss (ECL) approach, significantly reshaping how credit losses are recognized. This shift, driven by the 2008 financial crisis, ensures earlier and more transparent recognition of financial risks. IFRS 9 impairment applies to financial assets, requiring businesses to proactively assess and provide for potential credit losses. While it demands more data, judgment, and disclosure, it enhances the quality of financial reporting and supports better risk management in todayu2019s dynamic

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IFRS 9 impairment

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  1. IFRS 9 IMPAIRMENT IFRS 9 impairment refers to the accounting standard that requires entities to recognize expected credit losses on financial assets, rather than waiting for actual defaults. This forward-looking approach enhances transparency and timely loss recognition in financial reporting. Scope of IFRS 9 Impairment Financial assets held at amortised cost, such as trade receivables and loans. Financial assets measured at fair value through other comprehensive income (FVOCI). Loan commitments and financial guarantee contracts not measured at fair value. Lease receivables and contract assets accounted for under IFRS 15. SKMC Global assists businesses in implementing IFRS 9 by providing expert support in expected credit loss modeling and financial asset classification. +91 989-125-5499 info@skmcglobal.com www.skmcglobal.com

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