A complicated definition impossible to understand

The most complicated IFRS Standard is IFRS 9 which tries to regulate financial instruments.

I will quote just one sentence from it, as an example, which might be easy to understand for a specialist in financial instruments but which is impossible to understand for the mere accountant preparing financial statements.

The first line is encouraging because it is easy to understand but then in the second line they throw in an ‘as if’, which is unsettling and encourages the reader to stop and read no further. But don’t stop here. Keep going because it gets worse with the ‘even if.’ And then force yourself to read to the end, where you realise that you have understood nothing at all.

Now I am sure they meant well and wanted to include everything in their definition, but by doing so they managed to make it unintelligible.

Here it is:

“A contract to buy or sell a non‑financial item that can be settled net in cash or another financial instrument, or by exchanging financial instruments, as if the contract was a financial instrument, may be irrevocably designated as measured at fair value through profit or loss even if it was entered into for the purpose of the receipt or delivery of a non‑financial item in accordance with the entity’s expected purchase, sale or usage requirements.”

This is a typical sentence of IFRS 9 and not one of the most complicated. It shows that the whole standard is indigestible, difficult to read and impossible to understand for any normal person even any normal accountant.

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