OSFI issues final guideline on IFRS 9 Financial Instruments and Disclosures for FREs

OTTAWA ─ June 21, 2016 ─ Office of the Superintendent of Financial Institutions

The Office of the Superintendent of Financial Institutions (OSFI) today released its final guideline on IFRS 9 Financial Instruments and Disclosures. The guideline sets out OSFI’s expectations for Federally Regulated Entities (FREs) on the application of International Financial Reporting Standard 9 Financial Instruments (IFRS 9), issued by the International Accounting Standards Board (IASB) in July 2014. IFRS 9 replaces the International Accounting Standard 39 (IAS 39).

IFRS 9 is an improvement to the previous standard and has led OSFI to consider changes to its prudential expectations. The expectations set out in the guideline have been tailored to the size, nature and complexity of FREs.

Quick Facts

  • The guideline will be effective once FREs adopt IFRS 9, starting with Domestic Systemically Important Banks on November 1, 2017.
  • OSFI’s guideline is divided into chapters addressing the Fair Value Option, Impairment and Disclosure expectations and replaces the following seven guidelines that were in effect under IAS 39:
    • C-1 ImpairmentSound Credit Risk Assessment and Valuation of Financial Instruments at Amortized Cost
    • C-5 Collective Allowance – Sound Credit Risk Assessment and Valuation Practices for Financial Instruments at Amortized Cost
    • D-1, D-1A, D-1B Annual Disclosures
    • D-6 Derivatives Disclosures
    • D-10 Accounting for Financial Instruments Designated as Fair Value Option
  • The guideline incorporates several revisions resulting from comments received during the public consultation process, which began in March 2016. 
  • A summary of material comments received from industry stakeholders and an explanation of how they have been addressed is available in a table attached to the cover letter.

Quote

OSFI has long supported the move to an expected credit loss model. Our guideline promotes a consistent implementation and interpretation of the IFRS 9 requirements across Canadian Federally Regulated Entities while tailoring our expectations to the size, nature and complexity of these institutions, said Mark Zelmer, Deputy Superintendent.

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About OSFI

The Office of the Superintendent of Financial Institutions (OSFI) is an independent agency of the Government of Canada, established in 1987, to protect depositors, policyholders, financial institution creditors and pension plan members, while allowing financial institutions to compete and take reasonable risks.

Media Contact

Annik Faucher
OSFI – Public Affairs
annik.faucher@osfi-­bsif.gc.ca
613-949-8401