IFRS 9: FUTURE FINANCIAL INSTRUMENT
(SIGNIFICANT FOR BANKS AND FINANCIAL INSTITUTIONS)
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CURRENT STATUS
IFRS 9 has been issued for financial assets
Standards relating to financial liability, impairment, derecognition and hedging will be issued in a phased manner
Impact of IFRS 9 on banks are significant
HELD TO MATURITY CLASSIFICATION
Banks have to invest in government securities to comply with RBI’s prudential norms
As [...]
Banking system in India is so far accustomed to rule based approach and hence for any implementation, Banks look to the regulator for guidelines i.e. RBI.
In case of Basel II implementation, the National Supervisor i.e. RBI is provided with power to modify the guidelines to suit the country condition. The Objective of Basel seems to [...]
Do we need IFRS in India?
Indian Companies are listed on overseas stock exchange and have to prepare accounts with respect to GAAP followed in respective countries. Foreign companies having subsidiary in India have to prepare there accounts in order to meet overseas reporting.
FDI and FII’s are more comfortable with one global accounting language which can [...]
To what extent fair value accounting holds good for valuation in IFRS
Significant percentage of the balance sheet would be at Fair Value compared to current practice of carrying at historical cost under IFRS.
Use of Fair value:
At present Fair Value is limited to impairment of assets, measurement of retirement benefits and mark to market accounting of [...]
There is a feeling that IFRS – rather than business strategy – might actually be driving changes to corporate behavior. In some cases, it may help companies do things better – such as revisit their derivatives strategies – in other cases, it could be changing the way companies work just to get the desired accounting [...]
COMMERCIAL PAPER
DEFINITIONS :
Commercial paper is an unsecured and discounted promissory note issued to finance the short-term credit needs of large institutional buyers. Banks, corporations and foreign governments commonly use this type of funding.
An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities. Maturities on [...]