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Hi,
I would like to ask about the changes in relation to Impairment test of Financial Assets, is Expected losses model now the rule or is it still only the proposal ?
If it is the rule, should Auditor apply similar procedures to Impairment test as s/he would apply to audit of accounting estimates – it seems accounting under Expected losses model is based around estimating
Thank you
Whatever it takes and drawing on whatever sources are available, the auditor has to reach a state of mind where s/he is happy that the figures prepared by management do fairly and fully reflect the results and position of the company
Where financial assets have been impaired and the amount is material then, yes, audit the figure as you would any material estimate
Thank you
just to clarify that implies we go by new rules relating to Impairment of Financial instruments, the so called expected losses model?I cant find anything online relating to this apart from date 2018 when the standard is effective with early adoption permitted, should I hope that if a question related to this subject comes up it would be clarified which standard to go by?
Surely that would be your first step when auditing such an impairment – “Has the company chosen early adoption to follow the expected losses model?”
The next step would surely be to ensure that the accounting policy note in the draft financial statements explains fully that the client has adopted the model
Would you agree?
yes, that would be the way to go about it actually, it makes sense
Thank you !
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