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IFRS 9 Financial Instruments Implementing IFRS 9 in SAP® BusinessObjects Financial Consolidation starter kit for IFRS January 2017

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TABLE OF CONTENTS

1- INTRODUCTION ............................................................................................................................... 3

2- CLASSIFICATION AND MEASUREMENT OF FINANCIAL ASSETS ............................................ 4 2.1 Classification of financial assets ................................................................................................... 4 2.2 Measurement of financial assets ................................................................................................... 6 2.3 Reclassification ............................................................................................................................... 9

3- CLASSIFICATION AND MEASUREMENT OF FINANCIAL LIABILITIES .................................... 10 3.1 Principles ........................................................................................................................................ 10 3.2 Impacts on starter kit .................................................................................................................... 10

4- HEDGE ACCOUNTING ................................................................................................................... 11 4.1 Principles ........................................................................................................................................ 11 4.2 Comparison with IAS 39 ................................................................................................................ 12 4.3 Impacts on starter kit .................................................................................................................... 14

5- AMENDMENTS TO IAS 1 ............................................................................................................... 15 5.1 What’s new? ................................................................................................................................... 15 5.2 Practical issues .............................................................................................................................. 15 5.3 Impacts on the starter kit .............................................................................................................. 16

6- SUMMARY OF IMPACTS ON THE STARTER KIT ....................................................................... 17 6.1 Chart of accounts .......................................................................................................................... 17 6.2 Accounting schemes ..................................................................................................................... 20 6.3 Financial statements ..................................................................................................................... 21 Appendix 1 – Example: time value of options ............................................................................................ 22 Appendix 2 – Chart of accounts ................................................................................................................... 23 Appendix 3 – Example : impairment on debt instruments at FVTOCI ..................................................... 25 Appendix 4 – Statement of OCI .................................................................................................................... 27

Implementing IFRS 9 in the starter kit for IFRS I 3

1- Introduction

In July 2014, the IASB (International Accounting Standards Board) published the fourth and final

version of IFRS 9 Financial Instruments. This is the conclusion of a major project started in 2002

as part of the Norwalk Agreement between the IASB and US Financial Accounting Standards Board

(FASB) to reform financial instruments accounting.

The objective of this document is to describe how SAP® BusinessObjects Financial Consolidation

starter kit for IFRS (International Financial Reporting Standards) should be updated to comply with

this new standard.

The starter kit for IFRS is a configuration of SAP® BusinessObjects Financial Consolidation – part of SAP solutions for EPM (Enterprise Performance Management) – designed to perform, validate and publish a statutory consolidation in accordance with IFRS.

IFRS 9 replaces IAS 39 Financial Instruments: Recognition and Measurement and becomes effective

for annual periods beginning on or after 1 January 2018. Earlier application is permitted. IFRS 9

has been officially adopted by the European Union in November 2016, so that European companies

can now apply it on a voluntary basis (mandatory date is 1 January 2018).

Though simpler than IAS39, IFRS 9 remains a long and complex standard. In this document we

limit our analysis to the requirements that may have an impact on the consolidation software

configuration. We first summarize the main changes introduced by IFRS 9, covering the following

topics:

classification of financial assets,

measurement of financial assets, including impairment,

classification and measurement of financial liabilities,

hedge accounting.

Then, we get back to the consequences of IFRS 9 on the presentation of financial statements

(amendments to IAS 1). The last part is dedicated to the proposed enhancements to the starter kit

for IFRS.


2- Classification and measurement of financial assets

2.1 Classification of financial assets

2.1.1 Classification process under IFRS 9

IFRS 9 applies one classification approach for all types of financial assets based on two criteria:

the contractual cash flow characteristics of the financial asset, and

the company’s business model for managing the financial assets.

Firstly, it should be determined whether contractual cash flows are solely payments of principal

and interest (SPPI). The assessment of whether a financial asset meets the SPPI criterion may be

difficult. We will not get into this question in depth, as it has not any impact on our configuration.

Financial assets that do not meet the SPPI criteria should be measured at fair value through profit or loss (FVTPL).

For financial assets that meet the SPPI criteria the second question relates to the entity’s business

model. Three business models have been identified depending on their objectives:

1) The objective is to hold assets in order to collect contractual cash flows only

For most non-financial corporates, trade receivables will fall into this category. Such assets are

measured at amortized cost.

2) The objective is achieved by both collecting contractual cash flows and selling assets

Compared to the previous business model, this one will typically involve greater frequency and

volume of sales of financial assets. This business model is usual for banks and insurance

companies but may also exist in non-financial corporates. For example, a company may manage

the overall return of long-term debt instruments by collecting the contractual cash flows and

selling assets to reinvest and get a higher return in order to fund capital expenditure in the short

to medium term.

Such financial assets are measured at fair value through other comprehensive income (FVTOCI).

3) Any other objective

Any financial assets that are not held in one of the two business models mentioned above are

measured at fair value through profit or loss. FVTPL is the residual category under IFRS 9.

In addition to these rules, two options are available:

FVTOCI for investments in equity instruments that are not held for trading;

FVTPL for any financial asset if doing so eliminates or significantly reduces a measurement or recognition inconsistency (accounting mismatch).

In both cases, the option is irrevocable and should be made at initial recognition.

The above requirements should be applied to an entire asset even if it contains an embedded

derivative. That is, in contrast with IAS 39, a derivative embedded within a hybrid contract

containing a financial asset host is not accounted for separately.


2.1.2 Comparison with IAS39

The comparison between IAS 39 and IFRS 9 regarding the classification of financial assets can be illustrated as follows:

Transition from IAS 39’s classification to IFRS 9’s one is not straightforward, even though it will be

far simpler for non-financial corporates than for banks or insurers:

Most financial assets measured at fair value through profit or loss under IAS 39 will fall into the same category (FVTPL) under IFRS 9.

Provided that they pass the SPPI criteria, held-to-maturity investments as well as loans and receivables will remain measured at amortized cost as they are held to collect cash-flows. However, because embedded derivatives are no more accounted for separately, some hybrid instruments (such as convertible bonds) may have to be classified into the FVTPL category.

The available-for-sale investments form the residual category according to IAS 39. Depending on their cash flow characteristics and the business model applied, they will be split into the different categories of IFRS 9.

Equity investments that are not held for trading are classified as available-for-sale under IAS 39.

They are therefore measured at fair value, with changes recognized in OCI and recycled to profit

or loss at derecognition (sale of the investment). Under IFRS 9, they fall into the FVTPL category,

which means that they should be measured at fair value with changes recognized through profit

or loss. If the option is elected, changes in fair value are recognized in OCI but, in contrast with

IAS 39, without any further recycling through profit or loss. In both cases, the transition to IFRS 9

will change the way they are accounted for.

However, IFRS 9 does not apply to interests in subsidiaries, associates and joint-ventures. They are

accounted for in accordance with IAS 27 (in the holding’s separate statements). It means that those

equity investments can still be measured at cost or using the equity method in local accounts.

2.1.3 Impacts on starter kit

The new classification of financial assets under IFRS 9 makes it necessary to update the chart of

accounts delivered in the starter kit.

In the current configuration, accounts provided for financial assets fall under 3 categories:

Accounts corresponding to types of financial assets currently hold by companies (e.g. trade receivables)

Accounts needed to automatically calculate line items of the cash flow statement (e.g. accrued interests)

Accounts corresponding to categories of IAS 39 (e.g. available-for-sale financial assets) for financial assets that are not included in the previous categories.


In order to comply with IFRS 9 principles, new accounts will be added, corresponding to the new

categories of financial assets. More detail will be provided in section 6, taking into account all

impacts on the chart of accounts (including financial liabilities, OCI reserves in equity …).

2.2 Measurement of financial assets

2.2.1 Measurement principles

2.2.1.1 Amortized cost

Amortized cost is defined in the appendix A of IFRS 9 as being: “the amount at which the financial

asset or liability is measured at initial recognition minus the principal repayments, plus or minus

the cumulative amortization using the effective interest method of any difference between that

initial amount and the maturity amount and, for financial assets, adjusted for any loss allowance”.

The definition of amortized cost is unchanged from IAS 39. However, the amounts to be

recognized may differ because amortized cost is net of loss allowance and impairment rules have

been changed (see 2.2.2).

2.2.1.2 Debt instruments at FVTOCI

This category comprises financial assets which meet the SPPI criteria and which are held to collect

contractual cash flows and for sale.

The amounts that are recognized in profit or loss are the same as the amounts that would have

been recognized in profit or loss if the financial asset had been measured at amortized cost. It

means that interest revenue, foreign exchange gains and losses and impairment gains or losses are

recognized in profit or loss whereas other changes in the carrying amount are recognized in OCI.

Where the financial asset is derecognized, the cumulative gain or loss recognized in OCI is

reclassified to profit or loss.

2.2.1.3 Equity instruments at FVTOCI

Any equity instrument that is not held for trading may be, upon irrevocable option, measured at

FVTOCI. If this election is made, all fair value changes are recognized through OCI without any

further recycling to profit or loss (where the investment is sold for example). Cumulative gain or

loss may be transferred within equity.

2.2.1.4 Financial assets at FVTPL

This category comprises:

all financial assets that do not meet the SPPI criteria (except for the equity instruments for which the option for FVTOCI is elected)

any financial asset for which the option for FVTPL is elected, provided that this option eliminates or significantly reduces an accounting mismatch.

For financial assets classified in this category, any gain or loss, including changes in fair value, is

recognized in profit or loss.


2.2.2 Impairment

When addressing the impairment requirements, the main questions are:

which financial assets are concerned? (scope)

when should an impairment loss be recognized? (stages)

how to measure the loss allowance?

2.2.2.1 Scope

The impairment model applies to financial assets measured at amortized cost or at FVTOCI,

excluding equity investments1.

For financial assets measured at FVTOCI, the loss allowance should be recognized in OCI and

should not reduce the carrying amount in the statement of financial position. It means that the

impairment loss is recognized in profit or loss by transferring part of the changes in fair value

from OCI. This journal entry ensures that the carrying amount in the statement of financial

position always reflects the fair value at the reporting date.

2.2.2.2 Stages

As soon as a financial instrument is originated or purchased, 12-month expected credit losses are

recognized in profit or loss and a loss allowance is established. This serves as a proxy for the

initial expectations of credit losses (stage 1, as illustrated2).

12-month expected credit losses are a portion of

lifetime expected credit losses. It is not the expected

cash shortfalls over the next 12 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.

If the credit risk increases significantly and the

resulting credit quality is not considered to be

low credit risk (stage 2), full lifetime expected

credit losses are recognized.

If the credit risk of a financial asset increases

to the point that is considered credit-impaired

(stage 3), interest revenue is calculated based on the amortized cost (ie the gross carrying amount

adjusted for the loss allowance).

2.2.2.3 Measurement

Credit losses are the present value of all cash shortfalls. Expected credit losses are an estimate of

credit losses over the life of the financial instrument. When measuring expected credit losses, an

entity should consider:

the probability-weighted outcome: expected credit losses should represent neither a best or worst-case scenario. Rather, the estimate should reflect the possibility that a credit loss occurs and the possibility that no credit loss occurs

the time value of money: expected credit losses should be discounted to the reporting date

reasonable and supportable information that is available without undue cost or effort.

1 Except for investments in subsidiaries, joint-ventures or associates measured in accordance with IAS 27 2 From: IFRS 9 Financial Instruments, Project Summary, July 2014 published by the IFRS Foundation


An entity should recognize in profit or loss, as an impairment gain or loss, the amount of expected

credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the

amount that is required to be recognized in accordance with this standard.

2.2.2.4 Simplified approach

Full lifetime expected credit losses should be recognized for trade receivables or contract assets

that do not contain a significant financing component.

For trade receivables or contract assets that constitute a financing transaction, as well as for lease

receivables, there is an accounting policy choice to apply the “full” impairment model or to

measure loss allowance equal to lifetime expected losses.

2.2.3 Comparison with IAS 39

Even though there are only 3 categories of financial assets in IFRS 9 (instead of 4 in IAS 39), there

are 4 measurement models in IFRS 9 (instead of 3 in IAS 39):

It should be noticed that the ‘FVTOCI model for equity investments’ has no equivalent in IAS 39.

Besides, the impairment model under IFRS 9 is quite different from the one existing in IAS 39.

Firstly, requirements relating to impairment eliminate the threshold that was in IAS 39 for the

recognition of credit losses. Under the impairment approach in IFRS 9 it is no longer necessary for

a credit event to have occurred before credit losses are recognized. Instead, an entity should

always account for expected credit losses and changes in those expected losses. It means that,

except for limited cases, all financial assets (provided that they are subject to impairment) will

carry a loss allowance. Secondly, equity investments are no longer tested for impairment as they

are measured either at FVTPL or FVTOCI with no further recycling to profit or loss. It means that

no impairment on such assets3 is ever recorded through P&L.


The measurement models determine the accounting schemes that should be configured in the

starter kit. Changes should be planned as regards financial assets measured at FVTOCI. On the

contrary, the accounting schemes used for assets at amortized cost or at FVTPL remain unchanged

from those in IAS 39.

There are two categories of financial assets at FVTOCI: debt instruments and equity investments.

For debt instruments, the accounting schemes provided in the current starter kit comply with IFRS

9, except for impairment. As regards equity investments, the FVTOCI model for those assets is

3 Except for investments in subsidiaries, joint-ventures or associates measured in accordance with IAS 27


different from the one existing in the starter kit, as the accumulated OCI resulting from changes in

fair value will never be recycled through P&L. More detail is provided in section 6.

2.3 Reclassification

2.3.1 Principles

Reclassification from one category to another is possible for financial assets when and only when

an entity changes its business model for managing such assets. Such changes are expected to be

very infrequent.

Practical consequences are listed below.


A dedicated reclassification flow (F50) is available in the starter kit for all balance sheet accounts.

However, the reclassification principles as described in IFRS 9 may raise some issues: when the

reclassification implies a change in the carrying amount of the asset, the corresponding increase

or decrease has a different counterpart depending on the originated and destination categories.

Furthermore, when it affects accumulated OCI in equity, it may be – or not – a reclassification

adjustment in the statement of comprehensive income.

The existing accounting schemes in the starter kit can be used as follows:


3- Classification and measurement of financial liabilities

3.1 Principles

Most of the requirements have been carried forward unchanged from IAS 39. As a result, most

financial liabilities are measured at amortized cost. The exceptions are the following:

financial liabilities that are held for trading (for non-financial corporates: mainly derivatives), which are measured at fair value through profit or loss (FVTPL)

financial liabilities that are designated as at FVTPL on initial recognition. This option is subject to some criteria.

As regards the fair value option, changes have been made to address issues related to own credit

risk. The fair value of an entity’s own debt is affected by changes in the entity’s credit risk (own

credit). When an entity’s credit quality declines, the fair value of its liabilities fall (because they are

discounted using a higher interest rate), and if those liabilities are measured at fair value a gain is

recognized in profit or loss under IAS 39, which is counterintuitive. To avoid this, IFRS 9 now

requires the amount of the change in fair value due to changes in the entity’s own credit risk to be

presented in OCI, without any further recycling in profit or loss.

3.2 Impacts on starter kit

In the current version of the starter kit, all financial liabilities accounts can be measured either at

amortized cost or at fair value. This principle will remain unchanged.

However, the accounting schemes should be modified to take into account the new principles

regarding own credit risk. In the current version of the starter kit, the counterpart of fair value

changes in financial liabilities is a P&L account. Under IFRS 9, some fair value changes will have to

be recorded in OCI which means against an equity account. These amounts are not recyclable to

P&L even when the liability is derecognized and the amounts are realized.

It will therefore be necessary to provide a new equity account for non-recyclable OCI (see section

6).


4- Hedge accounting

4.1 Principles

To keep it simple, hedge accounting allows for offsetting P&L effects of both hedging instrument

and hedged item in the same accounting period. Only hedging relationships that meet the

qualifying criteria listed in IFRS 9 can benefit from hedge accounting.

There are three types of hedging relationships:

fair value hedge: a hedge of the exposure to changes in fair value of a recognized asset or liability or an unrecognized firm commitment

example: interest rate swap hedging a fixed rate borrowing

cash flow hedge: a hedge of the exposure to variability in cash flows of a recognized asset or liability or a highly probable forecast transaction

example: interest rate swap hedging a variable rate borrowing

hedge of a net investment in a foreign operation as defined in IAS21

4.1.1 Fair value hedges

As long as a fair value hedge meets the qualifying criteria, the hedging relationship should be

accounted for as follows:

the gain or loss on the hedging instrument should be recognized in profit or loss (or OCI if the hedged item is an equity instrument for which an entity has elected to present changes in fair value in OCI)

the hedging gain or loss on the hedged item should be recognized in profit or loss even though the hedged item is a financial asset measured at FVTOCI. However, if the hedged item is an equity instrument for which an entity has elected to present changes in fair value in OCI, those amounts should remain in OCI. When a hedged item is an unrecognized firm commitment, the cumulative change in fair value of the hedged item subsequent to its designation is recognized as an asset or a liability with a corresponding gain or loss recognized in profit or loss.

When a hedged item is a firm commitment to acquire an asset or a liability, the initial carrying

amount of the asset or the liability that results from the entity meeting the firm commitment is

adjusted to include the cumulative change in the fair value of the hedged item that was recognized

in the statement of financial position.

4.1.2 Cash flow hedges

As long as a cash flow hedge meets the qualifying criteria, the hedging relationship should be

accounted for as follows:

(a) the separate component of equity associated with the hedged item (cash flow hedge reserve) is adjusted to the lower of the following (in absolute amounts):

the cumulative gain or loss on the hedging instrument

the cumulative change in fair value of the hedged item

(b) the portion of the gain or loss on hedging instrument that is determined to be an effective hedge (ie the portion that is offset by the change in the cash flow hedge reserve calculated in accordance with (a)) should be recognized in OCI

(c) any remaining gain or loss on the hedging instrument (or any gain or loss required to balance the change in the cash flow hedge reserve calculated in accordance with a)) is hedge ineffectiveness that should be recognized in profit or loss


The amount accumulated in the cash flow hedge reserve is subsequently accounted for as follows,

depending on the nature of the underlying hedged transaction:

If it results in the recognition of a non-financial item, the amount accumulated in equity is removed from the separate component of equity and included in the initial cost of the hedged asset or liability. This accounting entry, sometimes referred to as ‘basis adjustment’, does not affect OCI of the period.

The same accounting treatment applies where a hedged forecast transaction of a non-financial item subsequently becomes a firm commitment for which fair value hedge accounting is applied

For any other cash flow hedges, the amount accumulated in equity is reclassified to profit or loss as a reclassification adjustment in the same period or periods during which the hedged cash flows affect profit or loss. This accounting entry does affect OCI of the period.

If cash flow hedge accounting is discontinued, the amount that has been accumulated in OCI

should:

remain in accumulated OCI if the hedged future cash flows are still expected to occur;

be immediately reclassified to profit or loss as a reclassification adjustment if the hedged future cash flows are no longer expected to occur.

After discontinuation, once the hedged cash flow occurs, any amount remaining in accumulated

OCI should be accounted for depending on the nature of the underlying transaction (as described

above).

4.1.3 Hedges of a net investment in a foreign operation

Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is

accounted for as part of the net investment, should be accounted for similarly to cash flow

hedges:

the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognized in OCI and

the ineffective portion is recognized in profit or loss.

The cumulative gain or loss on the hedging instrument relating to the effective portion of the

hedge that has been accumulated in the foreign currency translation reserve should be reclassified

from equity to profit or loss as a reclassification adjustment on the disposal of the foreign

operation.

4.2 Comparison with IAS 39

IFRS 9 broadens the application of hedge accounting by allowing more hedging instruments and

hedged items to qualify for hedge accounting. For example, IAS 39 allowed components of

financial items to be hedged but not components of non-financial items, though risk managers

often hedge risk components for non-financial items (e.g. oil price component of jet fuel price

exposure). IFRS 9 eliminates this distinction.

Furthermore, the hedge effectiveness testing has been simplified including the removal of the 80-

125% threshold.

IFRS 9 does not change the way the three categories of hedges (fair value, cash flow and net

investment in foreign operation) are accounted for, except for the following:

hedges of forecast transactions that result in the recognition of a non-financial item,

the accounting for the time value of options,

and the accounting for the forward element of forward contracts.


4.2.1 Hedges of forecast transactions

When a hedged forecast transaction results in the recognition of a non-financial item (e.g.

inventory), IAS 39 provided an accounting policy choice to account for the amount accumulated in

equity either as a basis adjustment or as a reclassification adjustment.

IFRS 9 now requires the amount accumulated in equity to be included in the initial carrying

amount of the hedged item (basis adjustment).

4.2.2 Time value of options

Unchanged from IAS 39, an option can be designated as a hedging instrument in its entirety or

only for the part corresponding to its intrinsic value.

As a reminder, the fair value of an option can be separated into two components: the intrinsic value (being

the difference between the current value of the underlying asset and the exercise price) and the time value

(which can be defined as the premium a rational investor would pay over its current exercise value, based on

the probability it will increase in value before expiry). For example, an entity pays CU 150 a call option to buy

gold at CU 1,000 when the spot price for gold is CU 1,100. The intrinsic value of the option is 100 (1,100 –

1,000); therefore, its time value is CU 50 (150 – 100).

If the option is designated in its entirety as a hedging instrument, changes in the portion of fair

value attributable to the time value result in ineffectiveness and are recognized in profit or loss

(same as IAS 39).

If only the intrinsic value is designated as the hedging instrument, IFRS 9 now requires the change

in fair value of the time value to be recognized in OCI and accumulated in a separate component

of equity (whereas the time value was accounted for at FVTPL under IAS 39). The subsequent

treatment of this accumulated amount depends on the nature of the hedged item.

In case of a transaction related hedged item, the accumulated OCI is removed in the same way as

the accumulated amounts in the cash flow hedge reserve: basis adjustment or recycling to P&L

depending on the result of the transaction (see. 4.1.2).

In case of a time-period related hedged item (e.g. a cap that protects against increases in interest

expenses on a floating rate bond), the accumulated OCI should be amortized on a systematic and

rational basis to P&L as a reclassification adjustment.

An example is presented in appendix 1.

4.2.3 Forward element of forward contracts

Forward contracts have a spot component and a forward component. For example, in a currency

forward contract, the forward rate (being the expected exchange rate at maturity) is based on the

spot rate (exchange rate at contracting date) and the difference between the interest rate of the

two currencies.

A forward contract may be designated as a hedging instrument in its entirety or only for the part

corresponding to the spot element. Under IAS 39, if only the spot component is designated as the

hedging instrument, the forward component is accounted for at FVTPL. When the forward contract

is designated as a hedging instrument in its entirety, the hedged item can be measured using the

forward rate instead of the spot rate.

IFRS 9 introduces a new optional treatment when the hedging instrument is the spot element only.

It is then possible to recognize the changes in fair value of the forward element in OCI in a

separate component of equity. The subsequent treatment is similar to the one described above for

time value of options.


4.3 Impacts on starter kit

Fair value hedge does not call for particular comment as changes in fair value of both hedging and

hedged item are recognized in profit or loss, which is a common accounting entry.

As regards cash flow hedges, the current starter kit already provides a dedicated account in equity

(E1540 Hedging reserve). However, changes are necessary to comply with the new IFRS 9

requirements:

Basis adjustment (where the amount accumulated in OCI is removed and included in the initial cost of an asset or liability) should be presented as a change in equity and not as a reclassification adjustment in the statement of comprehensive income.

The creation of a new dedicated account in equity for deferred costs of hedging (time value of options, forward element …) should be considered.

IFRS 9 does not bring any change regarding hedges of net investments in foreign operations. The

current starter kit is therefore compliant.


5- Amendments to IAS 1

5.1 What’s new?

IFRS 9 amends IAS 1 (Presentation of Financial Statements) to require the following line items to

be presented in the statement of profit or loss (or in the profit or loss section of the statement of

comprehensive income):

Revenue, presenting separately interest revenue calculated using the effective interest method;

Impairment losses (including reversals) determined in accordance with IFRS 9;

Gains or losses arising from the derecognition of financial assets measured at amortized cost;

Gains or losses arising on reclassification of a financial asset out of the amortized cost category into the FVTPL category;

If a financial asset is reclassified out of the FVTOCI category into the FVTPL category, any cumulative gain or loss previously recognized in OCI that is reclassified to profit or loss.

These last three items relate to infrequent operations.

5.2 Practical issues

5.2.1 Interest revenue

As presented in IAS 1 (§82), interest revenue calculated using the effective interest method is part

of revenue (operating). This presentation is relevant for financial industries but not for non-

financial ones. For those entities, interest revenue is usually of limited amount and included in

finance income.

5.2.2 Impairment losses

Impairment losses, including reversals of impairment losses or impairment gains, are presented

after finance costs in IAS 1 (§82).

However, some impairment losses, such as those recognized on trade receivables, may be

classified in operating activities.

5.2.3 Specific events

i) Gains or losses arising from the derecognition of financial assets measured at amortized cost

Financial assets measured at amortized cost are supposed to be held to collect contractual cash

flows. Therefore, gains or losses on disposal of such assets should be infrequent.

ii) Gains or losses on reclassification of financial assets

As explained previously in 2.3, reclassifications of financial assets between categories only occur

when an entity changes its business model. Such changes are then expected to be very infrequent.

Therefore, gains or losses arising on reclassification (from AC to FVTPL or from FVTOCI to FVTPL)

will rarely be recognized.


5.3 Impacts on the starter kit

It should be firstly reminded that the principle of materiality applies. IAS 1 (§31) specifies: “An

entity need not provide a specific disclosure required by an IFRS if the information resulting from

that disclosure is not material. This is the case even if the IFRS contains a list of specific

requirements or describes them as minimum requirements.”

It means that these new requirements included in IAS 1 should not be regarded as strictly

mandatory.

5.3.1 Interest revenue

The P&L account P2120 Interest income already exists in the current starter kit. However, it is

classified as part of finance income whereas IAS 1 amended includes it in operating revenue.

Besides, interest revenue forms part of financial result and is not a line item in the statement of

profit or loss.

Therefore, the question arises whether the starter kit should be modified to (i) classify interest

income in operating revenues and to (ii) present interest revenue as a separate line item in the

statement of profit or loss.

5.3.2 Impairment losses

In the current starter kit, there is only one dedicated P&L account for impairment losses that

regards equity investments (P2210 Allowances – reversals – for provisions on shares).

IFRS 9 introduces new rules for impairment recognition. In particular, equity investments are no

longer subject to impairment, except for those that are classified as subsidiaries, associates or

joint ventures. The account P2210 will therefore continue to be used but will systematically be

written down to zero at consolidated level (elimination of internal gains or losses).

For impairment on other financial assets, the question remains whether to provide new accounts

in the starter kit (operating? financial?) and even to add a dedicated line item in the P&L statement.

5.3.3 Specific events

As explained previously (§ 5.2.3), these gains and losses, whose amounts should be displayed

according to IAS 1 amended, will be very infrequent in practice.

The question then arises whether to create new accounts in the starter kit and even new line items

in the P&L statement.

All these questions are discussed below in section 6.


6- Summary of impacts on the starter kit

IFRS 9 will become mandatory for annual periods beginning on or after 1 January 2018. Until this

date, some starter kit users will still refer to IAS 39 whereas others will adopt IFRS 9.

Besides, on adoption of IFRS 9, an entity should disclose reconciliations between closing balances

under IAS 39 and closing balances under IFRS 9 regarding some key data (as required by IAS 7

amended).

Therefore, it is necessary to provide a configuration compliant with both IAS 39 and IFRS 9,

instead of directly switching to IFRS 9 principles.

6.1 Chart of accounts

The chart of accounts should be modified to take into account:

the new classification of financial assets (see 2.1.3),

the changes made to the measurement models for FVTOCI assets (see 2.2.4),

the new accounting scheme regarding own credit risk when a financial liability is measured at fair value (see 3.2),

the changes brought to hedge accounting (see 4.2),

the amendments to IAS 1 as regards the statement of profit and loss (see 5.2).

6.1.1 Financial assets and liabilities

As regards financial assets, new accounts should be added to comply with the new classification.

The question remains whether to provide dedicated accounts for impairment recognition. In the

current starter kit, as presented in appendix 2, dedicated loss allowance accounts are available for

financial assets that have characteristics of receivables For other types of financial assets, such as

available-for-sale, the same account is used for all accounting entries including impairment.

This principle is not questioned by IFRS 9 and will, therefore, be maintained in the next version of

starter kit. In this respect, 4 existing accounts need to be updated and 2 new accounts should be

added. Details are provided in appendix 2.

Regarding financial liabilities, the current chart of accounts already complies with IFRS9.

6.1.2 Equity accounts

In the current starter kit, there are 8 accounts in equity that are specifically designed for financial

instruments accounting:

E1540, E1541, E2040 and E2041 (hedging reserves) are used for cash flow hedges (respectively for before tax / tax related amounts and group’s share / non-controlling interests’ (NCI) share)

E1550, E1551, E2050 and E2051 (fair value reserves) relate to available-for-sale financial assets.

Some accounting schemes associated to hedge accounting need to be updated. It may make it

necessary to enhance the chart of accounts (see below).

As regards fair value reserves currently used for measuring AFS at fair value, they can be used

after transition to IFRS 9 as counterparts when measuring debt instruments at fair value (FVTOCI

category).


Lastly the new accounting rules regarding, on one hand, the equity investments measured at

FVTOCI and, on the other hand, the impact of changes in own credit risk for financial liabilities

measured at fair value may have consequences on the chart of accounts.

6.1.2.1 Hedge accounting

Depending on the nature of the hedged item, the amounts accumulated in the cash flow hedge

reserve can be subsequently reclassified to profit or loss or removed from equity and included in

the initial cost of the hedged asset or liability. In the first case, the recycling through P&L is part of

OCI (reclassification adjustment) whereas, in the second case, the amount transferred should be

presented as a movement in equity.

As a reminder, IAS 1 (§ 82A) requires to present separately items of other comprehensive income

that will be reclassified to profit or loss from those that will not.

Given that the accounting schemes are quite complex, it seems preferable to provide different

equity accounts to separate recyclable from non-recyclable items, rather than adding new flows.

Therefore we suggest that the existing 4 accounts of hedging reserves are split into 8 in order to

separate recyclable from non-recyclable accumulated amounts.

Besides, the question of providing dedicated accounts for deferred costs of hedging (cf. § 4.2.2

and § 4.2.3) is worth considering because it would highlight a change from IAS 39. However, it

would result in 16 equity accounts dedicated to hedge accounting, which seems quite a lot for

non-corporate financials. Moreover, deferred costs of hedging are accounted for following the

same principles as the accumulated amounts in the cash flow reserve. Therefore, we suggest using

the same equity accounts and keeping the current wording (i.e. hedging reserves) rather than the

new one used in IFRS 9 (cash flow hedge reserve) which seems more restrictive.

6.1.2.2 Equity investments at FVTOCI

The existing “fair value reserve” account is currently used for AFS financial assets. It cannot be

used as a counterpart for fair value measurement of equity investments at FVTOCI because it

represents a recyclable amount in OCI.

Therefore, it seems necessary to provide new equity accounts for non-recyclable fair value reserve

(4 accounts: before tax/ tax related amounts; group/NCI).

6.1.2.3 Own credit risk

As explained in section 3, the amount of the change in a financial liability’s fair value due to

changes in the entity’s own credit risk should be recognized in OCI without any further recycling

through P&L. It is therefore necessary to provide an appropriate equity account.

The question is whether the one needed for equity investments measured at FVTOCI (see above)

could also be used for own credit risk impact or if a new dedicated equity account would be

preferable.

On one hand, the option for fair value measurement of financial liabilities is not frequent within

non-financial corporates. On the other hand, using the same equity account than for fair value

measurement of equity investments would prevent us from presenting separately the impacts in

the statement of comprehensive income. Given that the corresponding accumulated amounts in

equity are of a very different nature, we believe it is worth providing dedicated equity accounts for

own credit risk impact.

The list of new equity accounts to be added in the starter kit is presented in appendix 2.


6.1.3 Profit or loss accounts

As explained in section 5, the amendments to IAS 1 have added mandatory line items in the

statement of profit or loss. Therefore, the question arises whether the starter kit should be

updated to comply with this requirements and to what extent.

6.1.3.1 Interest revenue

As regards interest revenue (see § 5.3.1), the corresponding account already exists in the current

starter kit. However, it is classified as a financial result component whereas interest income is part

of revenue in IAS 1 presentation.

We do not believe it will be appropriate to classify interest income as part of operating activities as

our starter kit is designed for non-financial corporates. The existing account (P2120 Interest

income) will therefore remain unchanged.

6.1.3.2 Impairment losses

Impairment losses on trade and other operating receivables are usually recognized in operating

result in non-financial corporates’ statements. In the current starter kit, there is not any dedicated

account as accounting schemes may vary from one company to another. The amendments brought

to IAS 1 suggest that it may be preferable to provide this kind of account. Therefore, a new

account P1670 “Operating impairment losses” will be added.

Impairment losses on other financial assets are usually classified as financial result items. The

existing account in the starter kit (P2210 Allowances – reversals – for provisions on shares) is

dedicated to equity investments classified as investments in subsidiaries, joint-ventures and

associates. Controls are configured in local packages between this account and the corresponding

balance sheet flows (F25/F35 entered on account A1812). It does not seem appropriate to include

in this account impairment losses on other financial assets. We rather suggest to add a new

account P2215 “Impairment losses on other financial assets”.

6.1.3.3 Specific events

As explained previously (§ 5.3.3), gains and losses arising from derecognition of financial assets

measured at amortized cost and gains or losses on reclassification of financial assets, whose

amounts should be separately displayed according to IAS 1 amended, will be very infrequent in

practice. The question then arises whether to create new accounts in the starter that would rarely

be used.

However, the addition of new P&L accounts has little impact on the configuration as they are only

associated to one flow (Y99).

Therefore, we suggest that 3 new accounts are made available in the starter kit:

P2310 “Gains or losses arising from the derecognition of financial assets measured at amortized cost”

P2320 “Gains or losses arising on reclassification of a financial asset from the amortized cost category into the FVTPL category”

P2330 “Gains or losses arising on reclassification of a financial asset from the FVTOCI category into the FVTPL category”

The question of whether those amounts should be presented on separate line items in the

statement of profit or loss is discussed in § 6.3.


6.2 Accounting schemes

The new accounting schemes introduced by IFRS 9 relate to:

impairment recognition on debt instruments measured at FVTOCI (see 2.2.2),

fair value measurement of equity investments when it is recognized in OCI (see 2.2.1.3),

impact of own credit risk on fair value measurement of financial liabilities (see 3.1).

6.2.1 Impairment of debt instruments measured at FVTOCI

IFRS 9 now clearly states that loss allowances recognized on debt instruments measured at

FVTOCI should not reduce the carrying amount in the statement of financial position. An example

is given in IFRS 9 implementation guidance (example 13).

For entities using dedicated loss allowance accounts in the balance sheet, this principle gives rise

to counterintuitive accounting entries as it is necessary to increase the gross value as shown in the

example below.

Based on the example 13 of IFRS 9 IG: purchase price: 1,000; fair value at closing: 950; impairment loss: 30

Balance sheet at closing if the entity does not use loss allowance accounts

Balance sheet at closing if the entity uses loss allowance accounts

In the starter kit, loss allowances may be recognized directly in the gross value account or in

dedicated accounts depending on the financial asset’s nature and the accounting policy applied.

Use of dedicated flows (F25 for impairment, F55 for change in fair value) is necessary to ensure

that the statement of cash flows line items are correctly calculated. The example of IFRS 9 IG has

been illustrated in the starter kit in appendix 3.

As regards changes in configuration, account families defined in the category scenario should be

carefully reviewed to ensure that impairment and fair value flows are available for all accounts

that may include financial assets at FVTOCI.

6.2.2 Equity investments at FVTOCI

The measurement model for equity investments at FVTOCI differs from the ones existing in the

current starter kit because the accumulated fair value reserve is never recycled through P&L.

As detailed before (§ 6.1.2.2), new equity accounts will be made available. These accounts,

associated to flows F55 (fair value changes during the period) and F50 (reclassification within

equity if needed when the investment is sold), will enable the new version of starter kit to comply

with these new requirements.

Financial asset 950 Equity (OCI) (20)

Profit or loss (30)

Debt on purchase 1 000

950 950

Financial asset - gross value 980 Equity (OCI) (20)

Financial asset - loss allowance (30) Profit or loss (30)

Debt on purchase 1 000

950 950


6.2.3 Own credit risk

The principles explained before for equity investments at FVTOCI also apply to own credit risk

impact. The new equity accounts associated to appropriate flows will ensure the starter kit’s

compliance.

6.3 Financial statements

6.3.1 Statement of profit or loss

The amendments to IAS 1 introduce 5 new line items in the statement of profit or loss (see §5.1).

As discussed in § 6.1.3, these changes make it necessary to add new accounts in the starter kit.

The question now remains whether new separate line items should be added in the statement of

profit or loss delivered within the starter kit.

Firstly, it should be noticed that the corresponding amounts (interest income, impairment losses,

gains or losses on reclassification …) are rarely material in case of non-financial corporates.

Secondly, the statement of profit or loss delivered within the starter kit currently presents 11 line

items only (totals and subtotals not included), which correspond to the mandatory line items of

IAS 1 (with limited exceptions) and the most frequent items observed in companies’ financial

reports. In that context, adding 5 new line items seems disproportionate. Lastly, the IASB has

launched a major project named “better communication” which aims to rebuild the entire financial

information including primary financial statements.

Based on these arguments, we believe that the statement of profit or loss delivered within the

starter kit should remain unchanged for the moment.

6.3.2 Statement of other comprehensive income

IFRS 9 indirectly introduces new line items in the statement of other comprehensive income:

changes in the fair value of debt investments at FVTOCI,

changes in the fair value of equity investments at FVTOCI,

changes in the fair value of liabilities designated at FVTPL due to changes in the company’s own credit risk.

On the other hand, the line items relating to available-for-sale investments will not be used any

more after transition to IFRS 9.

Lastly, IFRS 9 clarifies the subsequent treatment of accumulated hedging reserves: basis

adjustments (where the hedging reserve is removed and included in the initial cost of hedged

items) are not part of OCI whereas reclassification adjustments are part of it.

The statement of other comprehensive income delivered within the starter kit should be updated.

Changes, which are significant in the “non-recyclable” part, are presented in appendix 4.


Appendix 1 – Example: time value of options4

Entity X, a copper producer, wants to hedge sales that are forecast to take place on 30 September

20X4. On 1 January 20X4 it enters into a put option to sell 1,000 tonnes of copper for CU50/t. The

put option expires on 30 September 20X4. The copper spot price on 1 January 20X4 is CU50/t.

Entity X pays CU2,000 for the put option → Initial time value is CU2,000 (intrinsic value is nil as

the exercise price (CU50/tonne) equals the spot price)

1 January 20X4: To recognize the purchase of the option

Dr Option CU2,000

Cr Cash CU2,000

Subsequently, on 31 March 20X4:

The fair value of the option is CU5,000

The copper spot price is CU46/tonne

→ Intrinsic value is CU4,000 [i.e. (CU50-CU46) x 1,000 tonnes)] and time value is CU1,000 [i.e.

CU5,000 – CU4,000].

31 March 20X4: To recognize the change in fair value of the option, taking the change in the intrinsic component (the hedging instrument) to the CFH reserve, and recognizing the change in time value to the option time value reserve

Dr Option CU3,000 Dr OCI – Option time value reserve CU1,000

Cr OCI – Cash flow hedge (CFH) reserve CU4,000

Subsequently, on 30 September 20X4:

The fair value of the option is CU10,000

The copper spot price is CU40/tonne

Time value of the option is CU0 (maturity date)

1,000 tonnes of copper is sold at the spot rate.

30 September 20X4: To recognize sales of 1,000 tonnes of copper at spot rate

Dr Trade receivables CU40,000

Cr Sales revenue CU40,000

30 September 20X4: To recognize the change in fair value of the option

Dr Option CU5,000 Dr OCI – Option time value reserve CU1,000

Cr OCI – CFH reserve CU6,000

30 September 20X4: To reclassify the amount in the CFH reserve and the option time value reserve against sales revenue

Dr OCI – CFH reserve CU10,000 Dr Sales CU2,000 Cr Sales CU10,000

Cr OCI – Option time value reserve CU2,000

Calculation of copper sales revenue:

Copper sales at spot rate CU40,000

Gain or loss recycled from CFH reserve CU10,000

Initial time value of option CU(2,000)

Total CU48,000

4 This example is extract from BDO publication ‘Need to know – Hedge Accounting’


Appendix 2 – Chart of accounts Financial assets

Current starter kit

Account Classification IAS39 IFRS 9 Loss allowance

FVTPL HTM L&R AFS FVTPL FVTOCI AC

A1610 - Loans and cash advances, NC, Gross X X X X A1612

A1620 to A1624 – Receivables on disposal of PPE, intangible assets, investments in subsidiaries, investments in other entities, other assets

X X X X A1642 (1)

A1630 - Other receivables, NC, Gross X X X X A1642

A1810 - Investments in subsidiaries, JV and assoc. X X A1812 (2)

A1820 - Available-for-sale financial assets, NC X NA NA NA NA (3)

A1830 - Derivatives, NC X X NA

A1840 - Financial assets at FVTPL, NC X X NA

A1850 - Other financial assets, NC X X X X -

A2210 - Trade receivables, Gross X X X X A2212

A2220 to A2224 – Receivables on disposal of PPE, intangible assets, investments in subsidiaries, investments in other entities, other assets

X X X X A2262 (1)

A2230 - Dividends receivable X X X A2262 (1)

A2240 - Other receivables, Current, Gross X X X X A2262

A2250 - Accrued interests on receivables X X X X A2262 (1)

A2410 - Available-for-sale financial assets, Current X NA NA NA NA (3)

A2420 - Derivatives, Current X X NA

A2430 - Financial assets at FVTPL, Current X X NA

A2440 - Loans and cash advances, Current, Gross X X X X A2442

A2450 - Other financial assets, Current X X X X -

A2620 - Short-term deposits and other cash equivalents

X X X X X -

NC: Non-current NA: not applicable

(1) These accounts are needed to automatically calculate line items of the cash flow statement (2) Only for non-consolidated investments; consolidated investments are out of IFRS 9 scope and usually measured at cost or using the equity method (dedicated account: A1815) (3) Financial assets included in the “available-for-sale” accounts should be reclassified at transition date

Accounts to be renamed

Code Current description Modified description

A1840 Financial assets at FVTPL, NC Other financial assets at FVTPL, NC

A1850 Other financial assets, NC Other financial assets at amortized cost, NC

A2430 Financial assets at FVTPL, Current Other financial assets at FVTPL, Current

A2450 Other financial assets, Current Other financial assets at amortized cost, Current


New accounts

Code Description

A1860 Other financial assets at FVTOCI, NC

A2460 Other financial assets at FVTOCI, Current

Equity5

Description Current Code Comment

Group’s share

NCI6’s share

Hedging reserve, before tax E1540 E2040 To be renamed: Recyclable hedging reserve

Income tax on hedging reserve E1541 E2041 To be renamed: Income tax on recyclable hedging reserve

Fair value reserve E1550 E2050 To be renamed: Recyclable fair value reserve

Income tax on fair value reserve E1551 E2051 To be renamed: Income tax on recyclable fair value reserve

Non-recyclable hedging reserve, before tax

(*) (*) New account

Income tax on non-recyclable hedging reserve

(*) (*) New account

Non-recyclable fair value reserve (*) (*) New account

Income tax on non-recyclable fair value reserve

(*) (*) New account

Impact of own credit risk reserve (*) (*) New account

Income tax on own credit risk reserve

(*) (*) New account

(*) Codification principles may be reviewed to clearly separate recyclable amounts (e.g. E14xx) from non-

recyclable ones (E15xx)

5 Only equity accounts that are used in accounting for financial instruments are listed in the table. 6 NCI : non-controlling interests


Appendix 3 – Example : impairment on debt instruments at FVTOCI

This example is based on the example 13 included in IFRS 9 Implementation Guidance.

At acquisition date - Extract from IFRS 9

An entity purchases a debt instrument with a fair value of CU1,000 on 15 December 20X0 and

measures the debt instrument at FVTOCI. The instrument has an interest rate of 5 per cent over

the contractual term of 10 years, and has a 5 per cent effective interest rate. At initial recognition

the entity determines that the asset is not purchased or originated credit-impaired.

Debit Credit

Financial asset—FVTOCI CU1,000 Cash CU1,000

(To recognize the debt instrument measured at its fair value)

At acquisition date – In the starter kit7

Flow Debit Credit

A1630 – Other receivables, NC, Gross F20 1,000 or A1860 – Other financial asset at FVTOCI, NC8 F20 1,000 A2610 – Cash on hand F15 1,000

At closing date - Extract from IFRS 9

On 31 December 20X0 (the reporting date), the fair value of the debt instrument has decreased to

CU950 as a result of changes in market interest rates. The entity determines that there has not

been a significant increase in credit risk since initial recognition and that expected credit losses

should be measured at an amount equal to 12-month expected credit losses, which amounts to

CU30. For simplicity, journal entries for the receipt of interest revenue are not provided.

Debit Credit

Impairment loss (profit or loss) CU30 Other comprehensive income(a) CU20 Financial asset—FVTOCI CU50

(To recognize 12-month expected credit losses and other fair value changes on the debt instrument)

The cumulative loss in other comprehensive income at the reporting date was CU20. That amount

consists of the total fair value change of CU50 (ie CU1,000 – CU950) offset by the change in the

accumulated impairment amount representing 12-month expected credit losses that was

recognized (CU30).

At closing date – In the starter kit

The accounting entries are different depending on whether an allowance account is used or not.

1st solution (without allowance account)

Flow Debit Credit

P2215 – Impairment losses on other financial assets Y99 30 A1860 – Other financial asset at FVTOCI, NC F259 30 E1550 – Recyclable fair value reserve F55 20 A1860 – Other financial asset at FVOCI, NC F55 20

7 For simplicity, the amount is not split between current and non-current portion 8 To illustrate both cases: single account or two accounts, one for gross amount, another for loss allowance 9 Use of flow F25 is required for an appropriate classification in the statement of cash flows (adjustment for impairment losses)


2nd solution (with an allowance account)

Flow Debit Credit

P2215 – Impairment losses on other financial assets Y99 30 A1642 – Receivables, NC, Allowance F25 30 E1550 – Recyclable fair value reserve F55 20 A1630 – Other receivables, NC, Gross F55 20

Sale of the debt instrument - Extract from IFRS 9

On 1 January 20X1, the entity decides to sell the debt instrument for CU950, which is its fair value

at that date.

Debit Credit

Cash CU950 Financial asset—FVTOCI CU950 Loss (profit or loss) CU20 Other comprehensive income CU20

(To derecognize the fair value through other comprehensive income asset and recycle amounts accumulated in

other comprehensive income to profit or loss)

Sale of the debt instrument – In the starter kit

1st solution (without allowance account)

Flow Debit Credit

A2610 – Cash on hand F15 950 A1860 – Other financial asset at FVTOCI, NC F30 950 P1614 – Gains or losses on sale of other assets Y9910 20 E1550 – Recyclable fair value reserve F3011 20

2nd solution (with an allowance account)

Flow Debit Credit

A2610 – Cash on hand F15 950 A1642 – Receivables, NC, Allowance F30 30 A1630 – Other receivables, NC, Gross F30 980 P1614 – Gains or losses on sale of other assets Y99 20 E1550 – Recyclable fair value reserve F30 20

10 This P&L account has the same destination in the statement of cash flows as the pair E1550 / F30, so that this non-cash accounting entry will be neutralized. 11 Use of flow F30 is required for an appropriate classification in the statement of comprehensive income (reclassification adjustment)


Appendix 4 – Statement of OCI

CURRENT STARTER KIT STARTER KIT AFTER PROPOSED ENHANCEMENTS

Profit (loss) for the period Profit (loss) for the period

Gains (losses) on revaluation, before tax Gains (losses) on revaluation, before tax

Income tax relating to gains (losses) on revaluation Income tax relating to gains (losses) on revaluation

Other comprehensive income, net of tax, gains (losses) on revaluation Other comprehensive income, net of tax, gains (losses) on revaluation

Remeasurements of defined benefit plans Remeasurements of defined benefit plans

Income tax relating to remeasurements of defined benefit plans Income tax relating to remeasurements of defined benefit plans

Other comprehensive income, net of tax, remeasurements of defined

benefit plans

Other comprehensive income, net of tax, remeasurements of defined

benefit plans

Non-recyclable gains (losses) on cash flow hedges, before tax

Income tax relating to non-recyclable gains (losses) on cash flow hedges

Other comprehensive income, net of tax, non-recyclable, cash flow

hedges

Gains (losses) on remeasuring equity investments at FVTOCI, before tax

Income tax relating to gains (losses) on equity investments at FVTOCI

Other comprehensive income, net of tax, equity investments at FVTOCI

Impact of own credit risk on fair value of liabilities at FVTPL, before tax

Income tax relating to the impact of own credit risk on fair value of

liabilities at FVTPL, before tax

Other comprehensive income, net of tax, own credit risk impact on

liabilities at FVTPL, net of tax

Share of OCI of associates and JV accounted for using equity method that

will not be reclassified to P&L


will not be reclassified to P&L

Total other comprehensive income that will not be reclassified to

profit or loss

Total other comprehensive income that will not be reclassified to

profit or loss

Gains (losses) on exchange differences on translation, before tax Gains (losses) on exchange differences on translation, before tax

Income tax relating to gains (losses) on exchange differences Income tax relating to gains (losses) on exchange differences

Reclassification adjustments on exchange differences on translation,

before tax

Reclassification adjustments on exchange differences on translation,

before tax

Income tax relating to reclassification adjustments on exchange

differences

Income tax relating to reclassification adjustments on exchange

differences

Other comprehensive income, net of tax, exchange differences on

translation

Other comprehensive income, net of tax, exchange differences on

translation

Gains (losses) on remeasuring available-for-sale financial assets, before

tax

Gains (losses) on remeasuring financial assets at FVTOCI, before tax

Income tax relating to gains (losses) on AFS Income tax relating to gains (losses) on financial assets at FVTOCI

Reclassification adjustments on available-for-sale financial assets, before

tax Reclassification adjustments on financial assets at FVTOCI, before tax

Income tax relating to reclassification adjustments on AFS Income tax relating to reclassification adjustments on financial assets at

FVTOCI

Other comprehensive income, net of tax, available-for-sale financial

assets

Other comprehensive income, net of tax, financial assets at FVTOCI

Gains (losses) on cash flow hedges, before tax Gains (losses) on cash flow hedges, before tax

Income tax relating to gains (losses) on cash flow hedges Income tax relating to gains (losses) on cash flow hedges

Reclassification adjustments on cash flow hedges, before tax Reclassification adjustments on cash flow hedges, before tax

Income tax relating to reclassification adjustments on cash flow hedges Income tax relating to reclassification adjustments on cash flow hedges

Amounts transferred to initial carrying amount of hedged items

Income tax relating to transfer to initial carrying amount of hedged asset

Other comprehensive income, net of tax, cash flow hedges Other comprehensive income, net of tax, cash flow hedges


may be reclassified to P&L


may be reclassified to P&L

Total other comprehensive income that may be reclassified

subsequently to profit or loss

Total other comprehensive income that may be reclassified

subsequently to profit or loss

Other comprehensive income, net of tax Other comprehensive income, net of tax

Total comprehensive income Total comprehensive income

Comprehensive income, attributable to owners of parent Comprehensive income, attributable to owners of parent

Comprehensive income, attributable to non-controlling interests Comprehensive income, attributable to non-controlling interests

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