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IFRS 9, the Long-Awaited Accounting Standard

by François Masquelier, President of the Association of Corporate Treasurers in Luxembourg (ATEL) and Honorary Chairman of The European Association of Corporate Treasurers (EACT)

In Charles Perrault’s folktale, Bluebeard’s wife asks many time “Anne, Sister Anne, do you see anyone coming?”. Like Sister Anne, European treasurers keep asking EACT whether it sees something coming in terms of a financial instruments accounting standard.

IFRS 9 is slow in coming

Though we’ve scoured the horizon, nothing seems to be coming. However, the long-awaited final version of IFRS 9 will surely be published some day. The pioneers of IAS 39 have been applying that standard for almost 11 years and have been waiting for its successor, IFRS 9, for several years now. Patience is one of the qualities that modern treasurers truly need, especially when it comes to accounting standards and regulations.

There are several reasons for this delay. The global economic crisis has undoubtedly influenced the priorities of the IAS Board. The recurring problem of IASB staff turnover has also played a role. However, we have been told that IFRS 9 will soon be finalised. While we wait, it should be noted that the IASB has reopened the first Exposure Draft (ED) on Classification & Measurement in order to make a few changes and improvements. The part of the second ED dealing with the impairment model should be finalised in the summer of 2012. Finally, the macro-hedging part will, as has been discussed before, be separated from the rest and dealt with in its own ED, which is likely to be released in 2013.

So it will have taken four years to develop and release this standard, which is both sensible and crucial, especially since the 2008 financial crisis continues to affect markets and their volatility.