During the financial crisis, the delayed recognition of credit losses on loans and other financial instruments was identified as a weakness in existing incurred loss model of impairment stated by International Accounting Standards (IAS) 39, because it is believed that this delay might generate pro-cyclical effects. In response to the recommendations of G20, Financial Crisis Advisory Group (FCAG), and other international bodies, the International Accounting Standards Board (IASB) has undertaken, since 2009, as a part of the project to replace IAS 39, a project (partially shared with Financial Accounting Standards Board (FASB)) aimed at introducing an expected loss model of impairment. Within the scope of this subset project, the IASB has previously issued two exposure documents proposing models to account for expected credit losses: an exposure draft (ED) Financial Instrument: Amortized Cost and Impairment, published in November 2009, and a supplementary document (SD) Financial Instrument: Impairment, published jointly with the FASB in January 2011. However, neither of the two proposals received strong support from interested parties. Recently, the IASB, after the FASB’s decision to withdraw from the joint project and to develop a separate expected credit loss model based on a single measurement approach consisting in the sole recognition of lifetime expected credit losses, published a third proposalthe so-called “expected credit losses” model (ED/2013/3 Financial Instruments: Expected Credit Losses).
Global Financial Crisis and Accounting Rules: The Implications of the New Exposure Draft (ED) “Financial Instruments: Expected Credit Losses” on the Evaluation of Banking Company Loans
PIEROTTI, MARIA RITA;
2013-01-01
Abstract
During the financial crisis, the delayed recognition of credit losses on loans and other financial instruments was identified as a weakness in existing incurred loss model of impairment stated by International Accounting Standards (IAS) 39, because it is believed that this delay might generate pro-cyclical effects. In response to the recommendations of G20, Financial Crisis Advisory Group (FCAG), and other international bodies, the International Accounting Standards Board (IASB) has undertaken, since 2009, as a part of the project to replace IAS 39, a project (partially shared with Financial Accounting Standards Board (FASB)) aimed at introducing an expected loss model of impairment. Within the scope of this subset project, the IASB has previously issued two exposure documents proposing models to account for expected credit losses: an exposure draft (ED) Financial Instrument: Amortized Cost and Impairment, published in November 2009, and a supplementary document (SD) Financial Instrument: Impairment, published jointly with the FASB in January 2011. However, neither of the two proposals received strong support from interested parties. Recently, the IASB, after the FASB’s decision to withdraw from the joint project and to develop a separate expected credit loss model based on a single measurement approach consisting in the sole recognition of lifetime expected credit losses, published a third proposalthe so-called “expected credit losses” model (ED/2013/3 Financial Instruments: Expected Credit Losses).File | Dimensione | Formato | |
---|---|---|---|
GLOBAL FINANCIAL CRISIS.pdf
accesso aperto
Tipologia:
Versione finale editoriale
Licenza:
Creative commons
Dimensione
204.02 kB
Formato
Adobe PDF
|
204.02 kB | Adobe PDF | Visualizza/Apri |
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.