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66
HSBC BANK CANADA
Notes on the Consolidated Financial Statements (continued)
December 31, 2009 and 2008
1 Basis of preparation (continued)
e Changes in accounting policy during 2013 (continued)
IFRS 12 ‘Disclosure of Interests in Other Entities’ (‘IFRS 12’)
IFRS 12 is a comprehensive standard covering disclosures on all forms of interests in other entities, including for
unconsolidated structured entities. New disclosures are provided in notes 16 and 27.
IFRS 13 ‘Fair Value Measurement’ (‘IFRS 13’)
IFRS 13 establishes a single framework for measuring fair value and introduces new requirements for disclosure
of fair value measurements. The adoption of IFRS 13 did not have a material impact on the bank’s consolidated
financial statements. Disclosures are provided in note 24.
f Future accounting developments
Offsetting
In December 2011, the IASB issued amendments to IAS 32 ‘Offsetting Financial Assets and Financial Liabilities’
which clarified the requirements for offsetting financial instruments and addressed inconsistencies in current practice
when applying the offsetting criteria in IAS 32 ‘Financial Instruments: Presentation’. The amendments are effective
for annual periods beginning on or after 1 January 2014 and are required to be applied retrospectively. Based on our
assessment performed to date, we do not expect the amendments to IAS 32 to have a material effect on the bank’s
consolidated financial statements.
Financial instruments
The IASB issued IFRS 9 ‘Financial Instruments’ which introduced new requirements for the classification and
measurement of financial assets in November 2009 and financial liabilities in October 2010, with a further proposed
amendments in November 2012. Together, these changes represent the first phase in the IASB’s planned replacement
of IAS 39 ‘Financial Instruments: Recognition and Measurement’. IFRS 9 classification and measurement
requirements are to be applied retrospectively but prior periods need not be restated. Since the final requirements
for classification and measurement are uncertain, it remains impracticable to quantify the effect of the existing IFRS
9 as at the date of the publication of these consolidated financial statements.
The second phase in the IASB’s project to replace IAS 39 will address the impairment of financial assets.
In November 2013, the IASB completed the third phase of its project to replace IAS 39 and issued general hedge
accounting requirements. The revised hedge accounting requirements are applied prospectively and the bank is
currently in the process of assessing the impact on its consolidated financial statements. Macro hedging is not
included in the IFRS 9 project and will be addressed separately.
In November 2013, the IASB issued amendments to IFRS 9 in respect of transition requirements and the effective
date. As a result of these amendments, it is confirmed that all phases of IFRS 9 (except for changes to the presentation
of gains and losses for certain liabilities measured at fair value) must be applied from the same effective date. The
IASB plans to determine the effective date when the entire IFRS 9 project is closer to completion.