The Expected Impact of the Transition in Fair Value Accounting from International Accounting Standard No. (39) to Financial Reporting Standard No. (9) on the Level of Financial Statements and Reports: A Theoretical Analytical Study

Authors

Jameel Alnajjar, Al-Quds Open University - Gaza - Palestine.Follow

DOI

https://doi.org/10.35192/jjoas-h.v22i2.10

Abstract

This study aimed to determine the expected impact of the change in fair value accounting from IAS 39 to IFRS 9 at the level of financial statements and reports. It sought to identify the most significant deficiencies in fair value measurements in accordance with IAS 39, as well as the key parameters of the measurement and disclosure methods under IFRS 9 at the level of financial reports. Additionally, the study aimed to clarify the alternative measurement and hedging methods provided by IFRS 9 in comparison to IAS 39. The study employed an analytical and deductive approach based on documentary studies. Several conclusions were reached, including the objective of issuing IFRS 9, which is to provide users of financial statements with useful, comprehensive, and relevant information regarding the size and timing of cash flows, in addition to assessing uncertainty related to cash flows from financial instruments. The transition to the fair value standard under IFRS 9 is expected to improve the quality of financial reporting and enhance the value of accounting information by reducing earnings management practices. Furthermore, the application of IFRS 9 is anticipated to simplify accounting procedures for financial instruments compared to IAS 39, thereby improving the ability of users to understand the preparation of financial reports related to financial instruments. The study recommends that regulatory authorities, primarily the Central Bank, closely monitor the initial application of the financial reporting standard by companies. The issuance and application of IFRS 9 are expected to provide users with relevant, useful, and comprehensive information regarding the size and timing of cash flows. Corporate management must fully comply with the provisions of IFRS 9 to eliminate fluctuations in profit or loss resulting from changes in credit risk related to liabilities measured at fair value.

Recommended Citation

Alnajjar, Jameel (2020) "The Expected Impact of the Transition in Fair Value Accounting from International Accounting Standard No. (39) to Financial Reporting Standard No. (9) on the Level of Financial Statements and Reports: A Theoretical Analytical Study," Jordan Journal of Applied Science-Humanities Series: Vol. 22: Iss. 2, Article 10.
DOI: https://doi.org/10.35192/jjoas-h.v22i2.10
Available at: https://digitalcommons.aaru.edu.jo/jjoas-h/vol22/iss2/10