Banking groups believe IFRS 9 impairment
accounting proposals will improve financial statements in
comparison to those prepared using current IAS 39 rules, according
to a survey by Deloitte.
Deloitte’s global banking IFRS 9
impairment survey, also found many banking institutions have
already laid the framework for meeting the proposed effective date
of 2015 with more than half starting their implementation by the
end of 2011. But the majority of respondents (about 90%) will have
started by 2012.
The new impairment accounting rules, which are
being jointly developed by the International Accounting Standards
Board and the US Financial Accounting Standards Board, will shift
away from an incurred loss model to an expected loss model and the
changes will form part of IFRS 9 replacing IAS 39.
The survey has found industry scepticism still
remains as more than a quarter of banking groups are unconvinced
the changes will make financial statements more useful and more
than 50% believe it will result in a lack of comparability between
“While the rule changes are designed to
increase transparency around loan loss provisioning, survey
respondents indicated it is likely regulators would find the detail
most useful,” Deloitte global IFRS 9 banking leader Mark Rhys
“It was also found that it may be
difficult for those without technical accounting backgrounds to
understand how the changes affect loan loss accounting and,
consequently, loan pricing.”
The Big Four firm surveyed 56 major banking
groups across Europe, Middle East & Africa, Asia Pacific and
North America including seven of the top 10 global banking groups
measured by total assets.