Global Standards for the world economy

Friday 20 January 2017

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IFRS 9 and IFRS 15—one year to go

 03 January 2017


Hans Hoogervorst, IASB member

The final countdown has started to the effective date of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers.

Companies will have to apply the two Standards for reporting periods beginning on or after 1 January 2018.

Now is good time for a recap on the changes the Standards will bring and the range of helpful materials available on our website.




IFRS 9 changes


In summary, IFRS 9 will replace IAS 39 Financial Instruments and bring together the following aspects of accounting for financial instruments:

  • classification and measurement;
  • impairment; and
  • hedge accounting.

IFRS 9 is relevant to many different companies but will have the greatest effect on financial institutions.

In practice, the most significant change will be in the way financial institutions account for loan losses. IFRS 9 replaces the incurred loan loss model of IAS 39 with an expected loan loss model. The new model is likely to result in greater loan loss provisions by financial institutions and will provide investors with useful information on changes in credit risk exposure.

IFRS 15 changes


IFRS 15 will replace IAS 18 Revenue and IAS 11 Construction Contracts. It will establish a comprehensive framework for determining when to recognise revenue and how much revenue to recognise. It is expected to increase comparability among companies across sectors and markets.

IFRS 15 will affect almost all companies because it covers revenue from all contracts with customers, except for revenue from leases, financial instruments and insurance contracts.

Heads up for investors


Investors should find useful information in the notes to companies’ financial statements about the expected impact of a new Standard even before companies apply that Standard (this is a requirement in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors). For IFRS 9 this might include information about how loan loss provisions are likely to change, and for IFRS 15 it might include information about the likely effects on the amount or timing of revenue recognition.

Implementation assistance for companies


The Board provides educational materials to assist companies applying an IFRS Standard for the first time. Examples of such materials include articles, videos and web presentations.

Furthermore, both IFRS 9 and IFRS 15 were supported by Transition Resource Groups (TRG)—public discussion forums established to provide support for stakeholders on implementation issues arising from the new Standards.

Further information and support materials, including summaries of the TRG discussions, can be found here:


Related information

  • Unaccompanied versions of IFRS 9 and IFRS 15 are available here [eIFRS Basic required]
  • Full versions are available here [eIFRS Professional required]