IFRS 9 – Financial Instruments: Practical Exercise 3

Task: Assist SoftBank in the IFRS 9 impairment assessment.

1. Determine if the assets are in the scope of IFRS 9
2. If so, which impairment model would be used.
Financial Assets Scope of IFRS 9 impairment Model to be used
Investment in subsidiary Not in Scope (Scope exclusion) Not applicable
[IAS 27 – cost of investment]
Trade receivables: Non- Yes Lifetime ECL (Simplified approach)
corporate
[Payable in 30 days]
[Classification: AC]
Trade receivables: Corporate Yes Lifetime ECL (Simplified approach)
[Payable in 30 days]
[Classification: thru OCI]
Intercompany receivables: Yes 3 stage IFRS 9 model (General approach)
Loan to fellow subsidiary
[Repayable in 3 years]
[Classification: AC]

Derivative asset No (ECL not applicable for FVTPL Not in scope

[Classification: thru PL] classification)

Cash equivalents Yes 3 stage IFRS 9 model (General approach)

[Classification: AC]

Loans to Customers Yes 3 stage IFRS 9 model (General approach)

[Classification: AC]

Loans to Customers Yes (ECL amount to be 3 stage IFRS 9 model (General approach)
[Classification: Through OCI] reclassified from OCI to PL)
Prepaid expenses Not in scope (not a financial Not applicable
instrument)

S P E J & Associates
Chartered Accountants, India