Supervisory Roles in Loan Loss Provisioning in Countries Implementing IFRS

September 15, 2014

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Countries implementing International Financial Reporting Standards (IFRS) for loan loss provisioning by banks have been guided by two different approaches: International Accounting Standards (IAS) 39 and Basel standards. This paper discusses the different accounting and regulatory approaches in loan loss provisioning, and the challenges supervisors face when there are different perspectives and lack of guidance from IFRS. It suggests actions that supervisors can take to help banks meet regulatory and capital requirements and, at the same time, comply with accounting principles.

Subject: Banking, Capital adequacy requirements, Credit, Credit risk, Financial regulation and supervision, International Financial Reporting Standards, Loan loss provisions, Money

Keywords: bank, bank supervisor, Capital adequacy requirements, Credit, credit loss, Credit risk, Global, IFRS implementation, impairment loss, International Accounting standard, International Financial Reporting Standards, loan, loan loss provisioning, Loan loss provisions, loss, loss estimate, loss recognition, recognition model, Supervisory role, WP

Pages:
41
Volume:
2014
DOI:
https://doi.org/10.5089/9781484381120.001
Issue:
170
Series:
Working Paper No. 2014/170
Stock No:
WPIEA2014170
ISBN:
9781484381120
ISSN:
1018-5941

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