IFRS 9 is the International Financial Reporting Standard that addresses the accounting of financial instruments, such as loans, mortgages, and other credit instruments. The directive has three core components: classification of instruments, impairment calculation, and hedge accounting.
Because credit instruments are at risk of default, accounting for instruments in accounts must consider likelihood of future impairment, through expected loss and lifetime expected credit loss. Model-oriented approaches are required. Credit and regulatory risk teams thus perform IFRS 9 tasks, such as:
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