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HK FRS 9 Financial Instruments Hedge Accounting and Amendments to HK FRS 9, HK FRS 7 and HAS 39 December Newsletter Issue No. 07×2013 MAIN FEATURES A substantial overhaul of hedging accounting Better
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How to fill out hkfrs 9 financial instruments
How to fill out hkfrs 9 financial instruments:
01
Understand the scope and objective: Begin by familiarizing yourself with the scope and objective of hkfrs 9 financial instruments. This standard provides guidance on the classification, measurement, and derecognition of financial assets and liabilities.
02
Identify the categories of financial instruments: hkfrs 9 categorizes financial instruments into three main categories - financial assets, financial liabilities, and equity instruments. Determine which category your instrument falls into.
03
Classify the financial instrument: Once you have identified the category, classify the financial instrument accordingly. This involves assessing whether it meets the criteria for classification as measured at amortized cost, fair value through profit or loss, or fair value through other comprehensive income.
04
Measure the financial instrument: Depending on its classification, you will need to measure the financial instrument. hkfrs 9 provides specific guidelines on how to determine the initial and subsequent measurement of financial instruments.
05
Evaluate impairment: Assess whether there is any impairment on the financial instrument. hkfrs 9 introduces a new model for impairment, known as the expected credit loss model. Evaluate the credit risk and probability of default to calculate the expected credit loss.
06
Recognize and derecognize the financial instrument: Once the financial instrument has been measured and evaluated for impairment, you can recognize it in the financial statements. Additionally, hkfrs 9 provides guidelines on when and how to derecognize a financial instrument from the balance sheet.
Who needs hkfrs 9 financial instruments:
01
Financial institutions: Banks, insurance companies, and other financial institutions need to adopt hkfrs 9 financial instruments as it provides a comprehensive framework for the classification, measurement, and impairment of financial assets and liabilities.
02
Corporations with significant financial activities: Companies that engage in significant financial activities such as trading financial instruments, investing in securities, or issuing debt instruments must apply hkfrs 9 to ensure accurate and transparent reporting of their financial positions.
03
Auditors and regulators: Auditors and regulators rely on hkfrs 9 financial instruments to assess the financial health and compliance of entities. It serves as a benchmark for evaluating the appropriate classification, measurement, and recognition of financial instruments.
Overall, hkfrs 9 financial instruments is essential for entities involved in financial activities, ensuring consistent and reliable reporting of their financial positions and performance.
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What is hkfrs 9 financial instruments?
HKFRS 9 Financial Instruments is an accounting standard that sets out the guidelines for the classification, measurement, and recognition of financial assets and liabilities.
Who is required to file hkfrs 9 financial instruments?
Entities that are required to prepare financial statements in accordance with Hong Kong Financial Reporting Standards (HKFRS) are required to file HKFRS 9 Financial Instruments.
How to fill out hkfrs 9 financial instruments?
To fill out HKFRS 9 Financial Instruments, entities need to follow the guidelines set out in the standard and ensure that they classify, measure, and recognize their financial assets and liabilities correctly.
What is the purpose of hkfrs 9 financial instruments?
The purpose of HKFRS 9 Financial Instruments is to provide a more principles-based approach to the classification and measurement of financial instruments, which aims to improve the transparency and accuracy of financial reporting.
What information must be reported on hkfrs 9 financial instruments?
Entities must report information related to the classification, measurement, and recognition of their financial assets and liabilities, as well as any significant changes in these items.
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