RECOGNITION AND MEASUREMENT OF FORWARD AND FUTURES CONTRACTS UNDER IFRS 9 AND THEIR EFFECTS ON RISK MANAGEMENT AND FINANCIAL STATEMENTS

Abstract

Purpose: The study aims to review the forward and future contracts under IFRS 9 and their impact on risk management and financial statements. The emphasis of the research is to understand the importance of measurement and recognition of IFRS 9 for the risk handling and financial dealings in the context of financial statements.  IFRS 9 has an important role in understanding the utilization of better approaches to support the credit losses mishandling control and credit risk monitoring. The idea is also helpful in understanding the financial stability and improvement to avoid pro cyclicality in downturns

Method: The study used a mixed method when primary data is taken from 150 samples from questionnaire and secondary from literature. Smart PLS is run to extract the results for primary data and make sure that it is up to mark when hypotheses are reviewed. Thematic analysis is done to review the literature results.

Results: The main findings elaborate the idea of how forward and future contracts under IFRS 9 work better and their operation is supportive not only in management of risk but also dealing with the financial statements. Data shows that two hypotheses are proved as positive while two are partially approved.

Recommendations: More awareness of IFRS 9 tools can be helpful in dealing with the challenges of credit handling. The role of management and training is also essential in this regard where practical foundations offer IFRS 9 can be helpful.