Abstract
Like any other new standards of accounting, the International Financial Reporting Standards (IFRS) 9 is also the outcome of various forces contributing to the due process of the International Accounting Standards Board (IASB). This IFRS 9 project commenced in 2009 and was issued by IASB to replace the IAS 39 because of inappropriate loss allowances recognition that contributed to the 2008 financial crisis. IFRS 9 is considered a game changer in responding to this financial crisis, whereby it is designed to enhance the accounting treatment and reporting of the financial assets and financial liabilities.
IFRS 9 application is supposed to increase financial reporting’s relevance in the decision-making of investors by expanding measuring financial instruments at a fair value. This is primarily because this new IFRS 9 contains a forward-looking method in the financial instruments’ valuation and measurement. IFRS’s significant benefit might be recognised when entities’ financial reports are comparable across countries, whether it might improve management information for the purpose of decision-making, better capital access, including with foreign sources, and competitiveness enhancement.
This study identifies and explores the compliance and quality of compliance information of state-owned entities’ (SOEs) financial reports against the IFRS 9 requirements by using a qualitative content analysis method. This study indicates that most of the SOEs complied with the aspect of classification and measurement of the financial assets and liabilities under IFRS 9 requirements, but there is still room for improvement on the quality of the compliance information in most of the requirement paragraphs covered in this study. Financial Reporting Standards Council (FRSC) and/or Accounting Standards Board (ASB) might need to conduct regular assessments on the quality information presented in SOEs’ financial reports in terms of the IFRS 9 requirements.