Sesi 3:

Overview Ringkas PSAK Baru:

Financial Instrument – Recognition,
Deregnition and Measurement
(ED PSAK 71-IFRS 9)
PPL IAPI KORWIL JAWA BARAT
Penyaji: Dr. Hendang Tanusdjaja, CPA, CPMA, CA
Managing Partner KAP Darmawan & Hendang
1
Bandung, 11 Pebruari 2017

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2 Key references

Project Summary of IFRS 9- IFAC (July, 2014)

DipIFR-ACCA (June 2014)
Advanced Financial Accounting, Tan & Lee
(McGrawHill)
PH ED PSAK 71, DSAK-IAI, 24 October 2016
IFRS 9, Sue Lloyd, Vice Chairman IASB, 23
May 2016
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3 KRONOLOGIS PENGEMBANGAN IFRS 9 OLEH
IASB (PH DSAK IAI, 24 OKTOBER 2016)

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4 PERGANTIAN DARI IAS 39  IFRS 9
(PH DSAK IAI, 24 OKTOBER 2016)

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5 Scope of IFRS 9
IFRS 9 applies to all entities and to all types of financial instruments
except those specifically excluded, as listed below.
(a) Investments in subsidiaries, associates, and joint ventures
(b) Leases-IAS 17
(c) Employee benefit plans-IAS 19
(d) Insurance contracts
(e) Equity instruments issued by the entity (eg ordinary shares issued, or options and
warrants)
(f) Financial guarantee contracts
(g) Contracts for contingent consideration in a business combination, covered in IFRS 3
(h) Contracts requiring payment based on climatic, geological or other physical variables
(i) Loan commitments that cannot be settled net in cash or another financial instrument
(j) Financial instruments, contracts and obligations under share based payment
transactions- IFRS 2.

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8 KLASIFIKASI ASET KEUANGAN

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9 Types of business model

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10 Additional features
 There is a fair value option
 an asset that would be measured at amortised cost or FVOCI can be measured
at fair value through profit or loss if there is an accounting mismatch
 The default measurement for equity investments is fair value through profit or
loss
 Can instead elect to present fair value changes in other comprehensive income
(OCI)
 Not available for investments in equity instruments that are held for trading
 election available instrument by instrument
 dividends recognised in P&L –
 no recycling – no impairment

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11 Contractual cash flow characteristics (‘SPPI’)
 Contractual cash flows consistent with a basic lending arrangement (simple instruments)
– Comprised only of principal and interest
 Interest is consideration for:
 time value of money (TVM) and credit risk;
 basic lending risks(eg liquidity risks);
 other associated costs(eg administrative costs); and
 a profit margin
 ‘Principal’ is the fair value the financial asset at initial recognition
 amount transferred by holder (fair value)
 Explicitly excludes amounts inconsistent with basic lending such as cash flows that vary
with commodity prices or equity prices
 Explicit note can meet SPPI if interest is negative.
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14

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 IFRS 9: Classification
15
- Examples of instruments that pass the contractual cash flows test
 Measurement at amortised cost is permitted when the cash flows on a loan
are entirely fixed (eg a fixed interest rate loan or zero coupon bond), or
where interest is floating (eg a GBP loan where interest is contractually
linked to GBP LIBOR), or combination of fixed and floating (eg where
interest is LIBOR plus a fixed spread).

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 IFRS 9: Classification
16 - Examples of instruments that do not pass the contractual cash flows test

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17

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19 Classification of financial liabilities

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20 Initial recognition of Financial Assets/Liabilities
 Contract (a) is a normal trading contract. The entity does not recognise a liability for the iron
until the goods have actually been delivered. (Note that this contract is not a financial instrument
because it involves a physical asset, rather than a financial asset.)
 Contract (b) is a financial instrument. Under IFRS 9, the entity recognises a financial liability
(an obligation to deliver cash) on the commitment date, rather than waiting for the closing date
on which the exchange takes place.
 Note that planned future transactions, no matter how likely, are not assets and liabilities of an entity
– the entity has not yet become a party to the contract.

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21 Initial recognition of Financial Assets/Liabilities

IFRS 9 requires that financial liabilities are initially

measured at transaction price, ie the fair value of
consideration received except where part of the
consideration received is for something other than the
financial liability. In this case the financial liability is
initially measured at fair value measured as for financial
assets. Transaction costs are deducted from this amount
for financial liabilities classified as measured at
amortised cost.
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22 Subsequent measurement of financial assets
 Under IFRS 9, financial assets are measured subsequent to recognition
either at:
◦ At amortised cost, using the effective interest method, or
◦ At fair value

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23 Subsequent measurement of financial assets

On 1 January 20X1 Abacus Co purchases a debt

instrument for its fair value of $1,000. The debt
instrument is due to mature on 31 December 20X5. The
instrument has a principal amount of $1,250 and the
instrument carries fixed interest at 4.72% that is paid
annually. (The effective interest rate is 10%.)
How should Abacus Co account for the debt instrument
over its five year term?

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24 Subsequent measurement of financial assets at
Amortised Cost - Solution

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25 Subsequent measurement of financial assets at
Fair Value
 Where a financial asset is classified as measured at fair value, fair
value is established at each period end in accordance with IFRS 13
Fair value measurement. That standard requires that a fair value
hierarchy is applied with three levels of input:
Level 1 inputs. Unadjusted quoted prices in active markets for identical
assets or liabilities that the entity can access at the measurement date.
Level 2 inputs . Inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly or indirectly. These
may include quoted prices for similar assets or liabilities in active markets or
quoted prices for identical or similar assets and liabilities in markets that are
not active.
Level 3 inputs. Unobservable inputs for the asset or liability.

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26 Subsequent measurement of financial assets at
Fair Value
 Any changes in fair value are normally recognised in profit or loss.
There are two exceptions to this rule:
(a) The asset is part of a hedging relationship (see Se
(b) The financial asset is an investment in an equity instrument not held for trading. In
this case the entity can make an irrevocable election to recognise changes in the fair
value in other comprehensive income.
 Note that direct costs of acquisition are capitalised only in the case of a financial asset or
financial liability not held at fair value through profit or loss If the asset or liability is held
at fair value through profit or loss, the costs of acquisition are expensed. This means that
in the in the case of financial assets held at amortised cost, costs of acquisition are
capitalised. They would be added to the asset and deducted from the liability amount.
Similarly, if an irrevocable election has been made to take gains and losses on the
financial asset to other comprehensive income, costs of acquisition should be added to
the purchase cost.
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27 Subsequent measurement of financial assets at
Fair Value - Example

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28 Subsequent measurement of financial liabilities
 After initial recognition, all financial liabilities should be measured at
amortised cost, with the exception of financial liabilities at fair value
through profit or loss (including most derivatives). These should be
measured at fair value, but where the fair value is not capable of
reliable measurement, they should be measured at cost.
 Financial liabilities which are held for trading are re-measured to fair value
each year in accordance with IFRS 13 Fair value measurement with any
gain or loss recognised in profit or loss.
 The exceptions to the above treatment of financial liabilities are:
(a) It is part of a hedging arrangement
(b) It is a financial liability designated as at fair value through profit or loss and the
entity is required to present the effects of changes in the liability’s credit risk in
other comprehensive income
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29 Subsequent measurement of financial liabilities at
amortised cost -Example

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30

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31

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32 IFRS 9: Reclassification
- Examples: Reclassification permitted
 Reclassification is permitted in the following circumstances,
because a change in the business model has taken place:
(a) An entity has a portfolio of commercial loans that it holds to sell in the short
term. The entity acquires a company that manages commercial loans and has
a business model that holds the loans in order to collect the contractual cash
flows. The portfolio of commercial loans is no longer for sale, and the
portfolio is now managed together with the acquired commercial loans and
all are held to collect the contractual cash flows.
(b) A financial services firm decides to shut down its retail mortgage business.
That business no longer accepts new business and the financial services firm
is actively marketing its mortgage loan portfolio for sale.

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33 IFRS 9: Reclassification
- Examples: Reclassification not permitted
 Reclassification is not permitted in the following
circumstances, because a change in the business model has
not taken place.
(a) A change in intention related to particular financial assets (even in
circumstances of significant changes in market conditions)
(b) A temporary disappearance of a particular market for financial assets
(c) A transfer of financial assets between parts of the entity with different
business models.
 Reclassification of financial liabilities is not permitted.

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 Overview the Impairment Model:
34
ED PSAK 71 VS PSAK 55

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35 Overview the Impairment Model – ED PSAK 71

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36
Overview the Impairment Model IFRS 9
-Expected Credit Loss Model (ECL)-

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37 Overview the Impairment Model – ED PSAK 71
- Kerugian Kredit Ekspektasian-

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38 Basis for the Impairment model

The yield on financial instruments should reflect

initial credit loss expectations (higher credit risk
= higher margin).
When expected credit losses exceed those
initially expected, an economic loss is suffered.
Reflected by measuring impairment considering
changes from inception.
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39 Benefits of the Expected Credit Loss model

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40 Scope of the impairment requirements

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41 Overview the Impairment Model

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42 IFRS 9: What are12 month Expected Credit Losses?

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43 IFRS 9: What are12 month Expected Credit Losses?

 12-month expected credit losses are the portion of lifetime expected credit
losses that represent the expected credit losses that result from default
events on a financial instrument that are possible within the 12 months
after the reporting date.
 It is not the expected cash shortfalls over the next twelve months—instead,
it is the effect of the entire credit loss on an asset weighted by the
probability that this loss will occur in the next 12 months.
 It is also not the credit losses on assets that are forecast to actually default
in the next 12 months. If an entity can identify such assets or a portfolio of
such assets that are expected to have increased significantly in credit risk,
lifetime expected credit losses are recognised.

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44 IFRS 9: What are Lifetime Expected Credit Losses
(ECL)?

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45 IFRS 9: What are Lifetime Expected Credit Losses
(ECL)?
 Lifetime expected credit losses are an expected present value
measure of losses that arise if a borrower defaults on their obligation
throughout the life of the financial instrument.
 They are the weighted average credit losses with the probability of
default as the weight. 12-month expected credit losses are the portion
of the lifetime expected credit losses associated with the possibility
of a default in the next twelve months.
 Because expected credit losses consider the amount and timing of
payments, a credit loss (ie cash shortfall) arises even if the entity
expects to be paid in full but later than when contractually due.

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46 Exceptions to the General Model
Simplified approach
Trade receivables & contract assets
 Trade receivables & contract assets that do not contain a significant financing component
 must always recognise lifetime ECL
 Trade receivables & contract assets that contain a significant financing component
 can choose to always recognise lifetime ECL
Lease receivables
 Can choose to always recognise lifetime ECL
Purchased or Originated Credit Impaired financial assets
 Must always recognise lifetime ECL
 Done by reducing the effective interest rate to be net of initial credit loss expectations
 Interest revenue calculated on a net basis
 Allowance balance = (total ECL – initial ECL)
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47

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48 Assessing significant increases in credit risk
 Test is whether there is a significant increase in the risk of default
 The assessment of whether lifetime expected credit losses should be recognised is
based on a significant increase in the likelihood or risk of a default occurring since
initial recognition. Generally, there will be a significant increase in credit risk before a
financial asset becomes credit-impaired or an actual default occurs.
 Information to consider:
 Significant change in what would be charged for credit risk now because of changes in credit risk
since initial recognition
 Changes in external market indicators of credit risk eg CDS levels for obligor or bond prices
 Actual or expected change in internal or external credit rating
 Actual or expected increase in the risk of default on another facility with the same obligor
 An actual or expected significant change in the operating results of a borrower
 Changes in how the bank manages the credit risk on the instrument
 Past due information
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49 Assessing significant increases in credit risk

Collective and individual assessment basis

Assessment of significant increases in credit risk may be done on a
collective basis, for example on a group or sub-group of financial
instruments. This is to ensure that lifetime expected credit losses are
recognised when there is a significant increase in credit risk even if
evidence of that increase is not yet available on an individual level.
Lifetime expected credit losses are expected to be recognised before a
financial instrument becomes delinquent. Typically, credit risk increases
significantly before a financial instrument becomes past-due or other
lagging borrower-specifi c factors (for example, a modification or
restructuring) are observed.
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50 Measuring expected credit losses

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51 Reasonable and supportable information

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52 Credit-impaired financial assets (‘Stage 3’) Evidence

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53 Interest revenue and credit-impaired financial assets

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57 Derecognition of Financial Assets
 Derecognition is the removal of a previously recognised financial
instrument from an entity's statement of financial position. An entity
should derecognise a financial asset when:
(a) The contractual rights to the cash flows from the financial asset expire,
or
(b) The entity transfers the financial asset or substantially all the risks and
rewards of ownership of the financial asset to another party.
 IFRS 9 gives examples of where an entity has transferred
substantially all the risks and rewards of ownership. These
include:
(a) An unconditional sale of a financial asset
(b) A sale of a financial asset together with an option to repurchase the financial
asset at its fair value at the time of repurchase.
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58 Derecognition of Financial Assets

The standard also provides examples of situations where

the risks and rewards of ownership have not been
transferred:
(a) A sale an d repurchase transaction where the repurchase price is
a fixed price or the sale price plus a lender's return
(b) A sale of a financial asset together with a total return swap that
transfers the market risk exposure back to the entity
(c) A sale of short-term receivables in which the entity guarantees to
compensate the transferee for credit losses that are likely to
occur.

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59 Derecognition of Financial Assets
 It is possible for only part of a financial asset or liability to be derecognised. This is
allowed if the part comprises:
(a) Only specifically identified cash flows; or
(b) Only a fully proportionate (pro rata) share of the total cash flows.
For example, if an entity holds a bond it has the right to two separate sets of cash inflows:
those relating tothe principal and those relating to the interest. It could sell the right to
receive the interest to another partywhile retaining the right to receive the principal.
 On derecognition, the amount to be included in net profit or loss for the period is
calculated as follows.

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60 Derecognition of Financial Liabilities

A financial liability is derecognised when it is

extinguished – ie when the obligation specified in the
contract is discharged or cancelled or expires.
(a) Where an existing borrower and lender of debt instruments
exchange one financial instrument for another with substantially
different terms, this is accounted for as an extinguishment of the
original financial liability and the recognition of a new financial
liability.
(b) Similarly, a substantial modification of the terms of an existing
financial liability or a part of it should be accounted for as an
extinguishment of the original financial liability and the
recognition of a new financial liability.

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61 Derecognition of Financial Liabilities

(c) For this purpose, a modification is 'substantial' where the

discounted present value of cash flows under the new terms,
discounted using the original effective interest rate, is at
least 10% different from the discounted present value of the
cash flows of the original financial liability.
(d) The difference between the carrying amount of a financial
liability (or part of a financial liability) extinguished or
transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities
assumed, shall be recognised in profit or loss.
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62 PENGUNGKAPAN PENURUNAN NILAI

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63 ED PSAK 71 (2016): INSTRUMEN KEUANGAN

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64 ED PSAK 71 (2016): INSTRUMEN KEUANGAN

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65 ED PSAK 71 (2016): INSTRUMEN KEUANGAN

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66 ED PSAK 71 (2016): INSTRUMEN KEUANGAN

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67 AKUNTANSI LINDUNG NILAI
(PH DSAK IAI, 24 OKTOBER 2016)

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68 KRITERIA KUALIFIKASIAN LINDUNG NILAI

Suatu hubungan lindung nilai memenuhi syarat akuntansi

lindung nilai hanya jika seluruh kriteria berikut ini dipenuhi:
hubungan lindung nilai hanya terdiri dari instrumen lindung nilai yang
memenuhi syarat dan item lindung nilai yang memenuhi syarat.
pada awal hubungan lindung nilai terdapat penetapan dan dokumentasi
formal atas hubungan lindung nilai dan tujuan manajemen risiko entitas
dan strategi pelaksanaan lindung nilai.
hubungan lindung nilai memenuhi seluruh persyaratan efektivitas
lindung nilai berikut ini:

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69 KRITERIA KUALIFIKASIAN LINDUNG NILAI

(i) terdapat hubungan ekonomik antara item lindung nilai

dengan instrumen lindung nilai;
(ii)pengaruh risiko kredit tidak mendominasi perubahan nilai
yang dihasilkan dari hubungan ekonomik tersebut; dan
(iii)rasio lindung nilai dari hubungan lindung nilai adalah rasio
yang sama dari hasil kuantitas item lindung nilai yang secara
aktual dilindung nilai dan kuantitas instrumen lindung nilai
yang secara aktual digunakan entitas untuk melindung nilai
sejumlah kuantitas item lindung nilai tersebut.

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70 What does the new hedge accounting model
achieve?

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71 What does the new hedge accounting model
achieve?
 The new hedge accounting model enables companies to better reflect their
risk management activities in the financial statements. This will help
investors to understand the effect of hedging activities on the financial
statements and onfuture cash flows.
 Closer alignment with risk management
The new model more closely aligns hedge accounting with risk
management activities undertaken by companies when hedging their
financial and non-financial risk exposures. It will enable more entities,
particularly non-financial institutions, to apply hedge accounting to reflect
their actual risk management activities. This will assist users of financial
statements to understand entities’ risk management activities

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72

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73

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74
Ketentuan Transisi
ED PSAK 71 (2016): INSTRUMEN KEUANGAN

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Questions and Comments

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