Accounting Provisioning Under the Expected Credit Loss Framework : IFRS 9 in Emerging Markets and Developing Economies - A Set of Policy Recommendations
In 2009, the G-20 in London recommended that accounting standard setters, strengthen accounting recognition of loan-loss provisions by incorporating a broader range of credit information (G20 2009). In response, the International Accounting Standar...
| Main Authors: | , , , |
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| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/700511616757978211/Accounting-Provisioning-Under-the-Expected-Credit-Loss-Framework-IFRS-9-in-Emerging-Markets-and-Developing-Economies-A-Set-of-Policy-Recommendations http://hdl.handle.net/10986/35373 |
| Summary: | In 2009, the G-20 in London recommended
that accounting standard setters, strengthen accounting
recognition of loan-loss provisions by incorporating a
broader range of credit information (G20 2009). In response,
the International Accounting Standards Board (IASB) issued
International Financial Reporting Standard 9 (IFRS 9) in
July 2014, it became effective in 2018. This paper relies on
a survey and bilateral meetings with prudential supervisors.
This paper deals with the expected credit loss framework,
with a particular focus on EMDEs. In 2020, EMDEs were facing
challenges when dealing with IFRS 9 during the Coronavirus
(COVID-19) pandemic, given the unprecedented reversals in
capital flows as global risk appetite declined. EMDEs are
coping with weaker health care systems and more limited
fiscal space to provide support. Based on the experience of
the surveyed countries and their reflections on challenges
and potential remedies that they used while implementing the
IFRS 9 accounting framework, the authors identified a set of
high level policy recommendations for prudential supervisors
in emerging markets and developing economies (EMDEs) willing
to transition to IFRS 9. The paper is organized as follows:
Section 2 presents the survey results; Section 3 presents
policy recommendations for supervisory authorities in
countries that implemented IFRS 9 as well as in countries
that are still in the process of IFRS 9 implementation; and
Section 4 offers conclusions. |
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