Key regulations: accounting and NPL
IFRS 9 Financial Instruments
Scope: Global | Regulator: IASB | Industry: Finance | Topic: Accounting; Provisions and NPLs | Publication date: 01/01/2018
It establishes a framework for the classification and measurement of financial instruments, the recognition of impairment losses and hedge accounting. IFRS 9 replaces IAS 39 and introduces a principles-based approach for assessing whether a financial asset should be measured at amortized cost or fair value. It also improves the expected loss model for recognizing impairment losses, so that credit losses can be identified more quickly. It also simplifies hedge accounting requirements, making it easier for organizations to align their hedge accounting with their ' risk management strategies.
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Guidance on the prudential treatment of doubtful and refinanced exposures
Scope: Global | Regulator: BCBS | Industry: Finance | Topic: Provisions and NPLs | Date of publication: 04/04/2017
Guidance on the definition of non-performing and refinanced exposures, with the aim of harmonizing the scope, recognition criteria and level of implementation of these definitions. These concepts are not intended to replace those used for accounting purposes, nor the definition of default used in the IRB approach or the SA for credit risk but will be used for other purposes (e.g. supervisory monitoring of asset quality, Pillar 3 asset quality disclosures, etc.).
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Guidance on credit risk and accounting for expected credit losses
Scope: Global | Regulator: BCBS | Industry: Finance | Topic: Provisions and NPLs | Date of publication: 01/12/2015
It provides recommendations from the Basel Committee on Banking Supervision on best practices for credit risk management and the implementation of expected credit loss (ECL) accounting frameworks. The guidance addresses the need for timely recognition of credit losses to strengthen financial stability by proposing 11 principles covering everything from credit risk assessment to the interaction of ECL models with banks' regulatory practices. It is designed to complement existing accounting standards and improve consistency in the measurement and disclosure of credit risk.
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