This checklist covers some key questions you should consider.

Regarding your entity and the transition to AASB 9 Financial instruments: 

• Do those charged with governance (such as boards and audit committees) and management understand which financial instruments this standard impacts on?
• Do you have statutory receivables (for example rates, taxes and fines)? If so, do you understand the initial recognition changes when AASB 15 commences?
• Which financial instruments do you have, that were previously classified as loans and receivables, that do not meet the new tests for amortised cost?
• Do you currently use the available for sale classification and if so, have you determined how you will account for these instruments?
• Have you previously designated any financial instruments (such as investments) to be accounted for at fair value through P&L? If so, do you want to keep this approach, and do you still meet the criteria?
• How will the new impairment rules, including the requirement to incorporate forward-looking information, affect the calculation of your provision for doubtful debts?
• Do you need to assess significant credit risk change from origination? If so, how will you assess this?
• Do you have inter-company or related party loans? If so, have you determined whether the impairment provision is material?
• Do you currently apply a provision matrix approach to measure the impairment of your trade receivables? If so, will the forward-looking estimates be materially different to historical averages?
• Do you undertake hedging activities? If so, and you do not currently apply hedge accounting, have you assessed whether the simpler requirements are suitable for you? If you currently apply hedge accounting, have you assessed the impact of the new requirements, or chosen to stay with the ‘grandfathered’ old requirements (subject to Treasury Financial Reporting Requirements, if applicable)?
• Have you discussed your plans with us—before you have undertaken significant implementation effort?
• What system changes and internal control changes will you require? Will you be able to change your systems in time before the standards commence?
• If you are subject to Treasury’s Financial Reporting Requirements, have you considered the proposed transition choices? If not, what transition choices have you made?
• Have you prepared tailored draft disclosures under the new standard, using focused financial reporting principles?
• Will your financial report disclosures relating to the effect on you of the new accounting standard indicate that you are ready?