IFRS 9 Impairment Principles and Approach: Building an Expected Loss Model

This report from Oracle talks about the development and implementation of IFRS 9, International Finance Reporting Standards, with focus on financial instruments, and will be mandatory in several countries by January 2018. This will gradually replacing the old International Accounting Standards (IAS). 

The new standard aims to make the calculations and the methodology used by financial institutions more risk-sensitive. Much more detailed calculations are now needed at granular level.

Banks will need to make major changes and improvements to their existing data management systems, and finding the right software system is key. 

Contents

  • Introduction: The development of IFRS 9
  • Key changes introduced by IFRS 9
  • How will these changes affect financial institutions?
  • Impairment principles and approach: Building an expected loss model
    • Credit parameter modeling
    • Cash flow calculation
    • Provision method
    • Addressing the impairment challenges of IFRS 9
  • Case study: Major Australian bank assumes market leadership for IFRS 9
  • Readiness
  • Conclusion

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