Applying IFRS 9 impairment model in practice
- Publish date: 25 May 2016
- Archived on: 01 December 2018
The move from IAS 39’s incurred loss model to IFRS 9’s expected loss model has been widely heralded as a step in the right direction. But applying the standard in practice is proving challenging for many banks. This webinar looks at some of the issues they are facing. Broadcast 25 May 2016.
How and when banks reflect potential credit losses on their lending activity in their financial statements has been hotly debated for some years.
In the wake of the financial crisis, many claimed that IAS 39’s incurred loss model resulted in banks presenting an over-optimistic assessment of credit losses, leading to provisions that were too little, too late.
IFRS 9 introduces a more forward-looking expected loss model that focuses much more on expectations of future credit losses and thus allows earlier recognition of them. While the new model has been widely welcomed, it does not come without its challenges. In fact, in many ways, the new standard is more complex than the one it is replacing.
This webinar – which has been specifically designed for those in the banking sector – will provide an overview of IFRS 9’s new expected loss model and highlight some of the practical issues banks are facing as they attempt to put it into practice.
Presented by Colin Martin and Eddy James.
- Incurred loss versus expected loss
- IFRS 9’s three stage approach to loan-loss provisioning
- Calculating 12-month expected credit losses and lifetime expected credit losses
- Determining whether a deterioration in credit quality is significant
- Defining default
- The implications of the 30 day and 90 day rebuttable presumptions
- Disclosure requirements