Many intercompany loan receivables have no written terms, bear no (or a below market) interest rate; and/or do not have a fixed repayment date. Such features may pose real practical challenges when applying the classification and impairment provisions of IFRS 9 in separate/individual financial statements, as its application is premised on the existence of a contract.
This guidance note provides guidance on dealing with these two challenges for intercompany loan receivables in the scope of IFRS 9.