Under the new requirements of IFRS 9 Financial Instruments, allowances for expected credit losses are recognised in respect of investment in debt that are measured at amortised cost or at fair value through other comprehensive income

In your report, you are required:

Outline the accounting treatment of financial asset impairments in Royal Docks according to IFRS 9 Financial Instruments and discuss the potential benefits and drawbacks of this approach. (10 marks)