IFRS 9

IFRS 9 is the international accounting standard governing the recognition of financial instruments, defining their classification, measurement and the impairment of financial assets under an expected credit loss model. For insurers, it applies to the asset side of the balance sheet, the investments, mirroring IFRS 17 which governs the insurance liability. The simultaneous entry into force of the two standards was a major issue, since a mismatch in their application would have created an accounting asymmetry between assets and liabilities, a source of artificial profit volatility. The classification of assets under IFRS 9 determines whether their value changes flow through profit or through equity, which interacts with the treatment of liabilities and influences overall accounting volatility. For the analyst, reading IFRS 9 and IFRS 17 together is indispensable to understand the formation of an insurer's result: the accounting matching between assets and liabilities determines the readability of performance and the sensitivity of accounts to financial markets.

The joint application of IFRS 9 to assets and IFRS 17 to liabilities aims to prevent a change in investment value from creating accounting volatility with no offset on the liability side.

IFRS 9, instruments financiers IFRS, norme IFRS 9