IFRS 9 Classification, Impairment and Hedging Training Course for Finance Teams

Programme Summary

IFRS 9 classification, impairment and hedging is the subject of this five-day training course for finance managers, controllers and credit risk and treasury colleagues, ending in an IFRS 9 application file for one financial instrument portfolio. Teams often apply the standard through inherited spreadsheets nobody has challenged. The programme moves from principles, through diagnosis of portfolio treatment, to the design of models and documentation, then to application on one portfolio. Mars Training Centre UK delivers this programme on IFRS 9 for finance teams in banks and corporates.

The Business Case

When classification is settled once and never revisited, impairment models run on stale inputs and hedge documents are written after the event, reported earnings swing without explanation and auditors raise late adjustments. Teams that justify each treatment and trace each estimate to its data give boards steadier results.

• Earnings Stability: Improves as classification and hedge relationships are documented before results are reported.
• Estimate Quality: Rises as credit loss inputs are traced to data and tested for reasonableness.
• Audit Readiness: Grows as disclosure schedules reconcile to the ledger.

Principles and Evidence Base

• IFRS 9: The programme uses its business model and cash flow tests, three-stage impairment approach and hedge accounting requirements.
• IFRS 7: The programme uses its disclosure requirements to design the schedules built in Session 4.
• IFRS 13: The programme uses its fair value hierarchy to test measurement inputs in Session 2.
• IAS 32: The programme uses its presentation rules to separate debt from equity and to offset balances correctly.

Intended Participants

• Finance managers who own the accounting policy for loans, investments and borrowings.
• Controllers who prepare the entries and reconcile the instrument balances.
• Credit risk analysts who supply loss estimates and staging data to the accounts.
• Treasury colleagues who execute hedges and keep the supporting documentation.

The programme serves banks, insurers, manufacturers and trading groups, and suits teams where finance, risk and treasury staff must agree one treatment.

Learning Outcomes

1. Participants will be able to classify financial assets and liabilities using the business model and cash flow tests of IFRS 9.
2. Participants will be able to diagnose weaknesses in fair value inputs and measurement categories.
3. Participants will be able to construct a three-stage expected credit loss calculation with documented inputs.
4. Participants will be able to evaluate whether a hedging relationship qualifies and how it is documented.
5. Participants will be able to prepare disclosure schedules that reconcile to the ledger under IFRS 7.
6. Participants will be able to justify an accounting treatment to auditors and a finance committee.

Programme Structure

Day 1: IFRS 9 Classification Principles

How is each instrument placed in the right measurement category?

• Financial Instrument Inventory Template
• Business Model Assessment Memo
• Cash Flow Characteristics Test
• Debt and Equity Separation under IAS 32
• Reclassification Trigger Review

Day 2: Diagnosing Measurement and Credit Risk Exposure

Where do measurement inputs and credit deterioration distort reported values?

• Fair Value Hierarchy Review under IFRS 13
• Effective Interest Method Walkthrough
• Significant Increase in Credit Risk Indicators
• Staging Allocation Diagnostic
• Modification and Derecognition Checklist

Day 3: Designing Impairment Models and Hedge Documentation

How are credit loss estimates and hedge files built to withstand challenge?

• Probability of Default and Loss Given Default Inputs
• Forward-Looking Scenario Weighting
• Expected Credit Loss Calculation Template
• Hedge Designation Documentation Form
• Hedge Effectiveness and Rebalancing Log

Day 4: Disclosure, Controls and Governance

How are results explained to readers, auditors and committees?

• IFRS 7 Disclosure Schedule Pack
• Credit Loss Movement Reconciliation
• Model Validation and Overlay Review
• Instrument Accounting Control Matrix
• Finance Committee Briefing Paper

Day 5: Applying IFRS 9 to One Instrument Portfolio

Is the portfolio treatment ready for audit and committee review?

• Applying the Session 1 Classification Tests to the Case Portfolio
• Running the Session 3 Credit Loss Template
• Testing the Session 3 Hedge File Against Qualifying Criteria
• Reconciling the Session 4 Disclosure Schedules
• Completing the IFRS 9 Application File

Methodology

The programme uses a data workshop built on anonymised loan books, investment lists, hedge files and auditor queries. Participants work in small teams as preparer, risk analyst and reviewer, take one portfolio from first classification to final disclosure and record the evidence behind each choice.

• Suggested activity: Classifying a mixed list of instruments and defending each category.
• Suggested activity: Staging a sample loan book and calculating the resulting credit loss.
• Suggested activity: Completing a hedge file and challenging it as an auditor would.

Capstone Output

Each participant completes an IFRS 9 application file for one instrument portfolio. It holds a classification register, a credit loss calculation, a hedge documentation set and a disclosure schedule pack. The file is used to brief a finance committee, answer auditor queries and start the next reporting cycle.

Frequently Asked Questions

Is IFRS 9 suitable for finance staff who have not applied the standard before?

Yes. IFRS 9 is taught from classification upwards for finance, risk and treasury colleagues, and assumes familiarity with basic financial statements but no earlier work on expected credit losses.

Which standards does IFRS 9 training rest on in this programme?

IFRS 9 training rests on IFRS 9 itself for classification, impairment and hedging, with IFRS 7 for disclosure, IFRS 13 for fair value and IAS 32 for presentation.

How is the IFRS 9 application file used at work?

You use the IFRS 9 application file to brief a finance committee, answer auditor queries and start the next reporting cycle with documented treatments.

How does IFRS 9 differ from a general financial reporting programme?

IFRS 9 centres on classification, credit loss and hedge accounting for financial instruments, while a general financial reporting programme spans every statement and standard.