Application of IFRS 9 to the Natural Resources Sector

October 2018

The origins of IFRS 9 Financial Instruments stem from the global financial crisis and is a very significant standard for the banking sector. Whilst the impact on IFRS 9 is not as great on nonfinancial entities, those in the natural resources sector should not ignore its impacts.

The key features of IFRS 9 to be considered by those in the Natural Resources Sector include:
  • Moving from an incurred loss model to a predicted loss model
  • The strict rules as to which financial assets can be recorded at amortised cost
  • Investments in unlisted shares to be recorded at fair value
  • Simplified hedge accounting rules.