Banking Supervisors Tracing the Transition to IFRS 9

Háda, Attila (2019) Banking Supervisors Tracing the Transition to IFRS 9. FINANCIAL AND ECONOMIC REVIEW, 18 (4). pp. 7-111. ISSN 2415-9271 (print); 2415-928X (online)

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Abstract

The paper presents the supervisory approach of the transition to IFRS 9, implemented in the credit institution sector from 1 January 2018. The author evaluates the impacts of the transition and describes the IFRS-specific items that require a different supervisory approach. One of the conclusions of the paper is that transition to IFRS9 had no major influence on credit institutions’ capital adequacy situation. When assessing the objective of fair valuation and hedge accounting, it may be stated that those essentially support forward-looking, risk-based supervision. As a result of the introduction of the new impairment rules, prudential and accounting impairment approximated each other, but the management of expected losses not sufficiently covered by impairment is not explicit, and the author also makes a recommendation for a potential solution.

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