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Ifrs 9 Approach Within The „Regulatory-Accounting” Mix

Author

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  • Ovidiu VOICU

    (National Institute for Economic Research, Romania)

Abstract

The actuality of the present article is argued that once with the global financial crisis a serious problem in the process of managing risks in the banking sector appeared. This paper focuses on the main innovative elements introduced by IFRS 9. The key element is represented through the model based on expected credit losses, which replaced the incurred loss model of IAS 39. The model was designed to counteract one of the shortcomings revealed by the financial crisis – risk of impairment losses on loans. The purpose of the article is to familiarize stakeholders with major milestones and concepts related to IFRS 9. In the article the following research methods were used: the logical method of analysis and systemic synthesis, comparative method, classification method, the method of deduction, etc. The paper pointed out the technical details under which banks should consider the significant increase of credit risk. The paper stressed the need for an innovative model which could forecast potential losses from credit risks.

Suggested Citation

  • Ovidiu VOICU, 2016. "Ifrs 9 Approach Within The „Regulatory-Accounting” Mix," ECONOMY AND SOCIOLOGY: Theoretical and Scientifical Journal, Socionet;Complexul Editorial "INCE", issue 4, pages 71-78.
    • Handle: RePEc:nos:ycriat:318
    Note: CZU: 330.131.7:336.77+006.44(100):657
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    References listed on IDEAS

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    1. Bouvatier, Vincent & Lepetit, Laetitia, 2012. "Provisioning rules and bank lending: A theoretical model," Journal of Financial Stability, Elsevier, vol. 8(1), pages 25-31.
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    3. Bouvatier, Vincent & Lepetit, Laetitia, 2012. "Provisioning rules and bank lending: A theoretical model," Journal of Financial Stability, Elsevier, vol. 8(1), pages 25-31.
    4. Mingcherng Deng & Tong Lu & Dan A. Simunic & Minlei Ye, 2014. "Do Joint Audits Improve or Impair Audit Quality?," Journal of Accounting Research, Wiley Blackwell, vol. 52(5), pages 1029-1060, December.
    5. Gunther Gebhardt & Zoltan Novotny-Farkas, 2011. "Mandatory IFRS Adoption and Accounting Quality of European Banks," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 38(3-4), pages 289-333, April.
    6. Robert M. Bushman & Christopher D. Williams, 2015. "Delayed Expected Loss Recognition and the Risk Profile of Banks," Journal of Accounting Research, Wiley Blackwell, vol. 53(3), pages 511-553, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    IFRS 9; impairment; credit risk expected loss; provision.;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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