It is important not to underestimate the challenges of applying the new IFRS 9 model to intercompany loans.
The majority of related company loans (including intragroup loans as well as loans to associates or joint ventures) are debt instruments that fall within the scope of IFRS 9.
This means that even though some loans may seem similar to a capital contribution, they should typically be accounted for in accordance with IFRS 9 instead of IAS 27 (i.e. at cost less impairment) or IAS 28 (i.e. using the equity method). Read More