December 15, 2020...8:24 pm

Repurchase Agreement Under Ifrs 9

The obligation for a company to repurchase the asset (a futures contract – see 3.7.2); Pension transactions are generally of three forms: [IFRS 15:B65] A pension contract is a contract in which an entity sells and promises an asset or has the possibility (either in the same contract or in another contract) to buy back the asset. The asset repurchased may be the asset initially sold to the debtor, an asset essentially identical to the asset or other asset whose assets originally sold is an item. [IFRS 15:B64] In the borrower`s accounts, the bonds are recorded as assets and the money received by the lender is recorded under the liability as “pension contract borrowing.” On the basis of IFRS 15, the repurchase transaction should be treated as a financing agreement that does not generate revenue. Another member was concerned that the identity document would focus on implementation guidelines, which are not within the standard itself, and suggested that the agenda decision be read carefully. Another member wanted the decision on the agenda to be reduced and there would also be a discussion of the complication of the problem, and that judgment would be necessary to determine accounting treatment. Accounting for the proceeds of the sale as financial liabilities DR Cash /CR Financial liabilities A member added that these transactions are relatively frequent structured transactions and that there are in practice differences in treatment. The accounting processing of these transactions is generally based on the facts and circumstances of the transactions, as well as on a company`s interpretation of IG B6. One member asked why such transactions were common. The first member discussed gave various economic and accounting reasons for the conclusion of such a transaction, as well as the ability or inability of the company to conduct different types of transactions. Asset Owner (Cash Borrowers) The owner of the asset sells securities (financial assets) to an investor A member began the discussion by stating that this was a complex subject and that an element of appreciation was required. Moreover, the example of IG B6 is one where the counterparty is the same and, therefore, the same consideration is an indicator rather than a rule. The Member added that the last paragraph of IG B6 alluded to the fact that the purpose of concluding several contracts should be considered, that is, if it reflected the same effect, as if it were a transaction.

Staff members summarized the feedback they received from public relations and submitted them to the committee. It concluded that the Committee could not address the specific issue, as an assessment is necessary, which would depend on the facts and concrete circumstances related to this issue.