scholarly journals IAS 39 and IFRS 9: Effects of Changing Accounting Standards for Financial Instruments on the Financial Asset Management of Commercial Banks in the Sekondi-Takoradi Metropolis of Ghana

2020 ◽  
Vol 10 (1) ◽  
pp. 58
Author(s):  
Charles Ayariga
Keyword(s):  
Asset Management ◽  
Commercial Banks ◽  
Accounting Standards ◽  
Financial Asset ◽  
Financial Instruments ◽  
Descriptive Research ◽  
Alpha Reliability ◽  
Ias 39 ◽  
Ifrs 9 ◽  
Moderate Effect

The purpose of the study was to investigate the effects of changing accounting standards for financial instruments on the financial asset management of commercial banks in the Sekondi-Takoradi Metropolis (STM), focusing on IAS 39 and IFRS 9. Descriptive research design was used. The population was branch managers and account/audit/finance staff of 13 commercial banks in the metropolis who were 91 in number. The census method was used to capture all subjects within the accessible population. Questionnaire with a Cronbach alpha reliability coefficient of 0.871 was used to collect the data. Out of the 91 questionnaires administered, the researcher was able to retrieved 73 completed and accurate questionnaires from the respondents. Both descriptive and inferential statistical tools were used to analyse the data. The findings of the study revealed that requirements of IFRS 9 have been welcomed by commercial banks in STM. The replacement of accounting standards for financial instruments, from IAS 39 to IFRS 9, has moderate effect on the effectiveness of the financial asset management of the banks. It was recommended to management of the banks to ensure that branch managers, and account/audit/finance staff are abreast with IFRS 9 compliance. This will help them adapt meaningfully to the changing accounting standards for financial instruments, especially from IAS 39 to IFRS 9, in order to help manage the financial asset of the banks effectively.

scholarly journals Improved forecast assessment for the expected credit losses in credit risk monitoring in commercial banks in the context of international and Russian practices

2020 ◽  
Vol 15 (3) ◽  
pp. 445-457
Author(s):  
Elena Vladimirovna Travkina ◽  
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Credit Risk ◽  
Commercial Banks ◽  
Banking Sector ◽  
Assessment Model ◽  
Financial Instruments ◽  
Credit Risk Assessment ◽  
Ifrs 9 ◽  
Credit Losses

Current banking sector’s performance raises the issues connected with the IFRS 9 Financial Instruments driven transformation of the forecast assessment for the expected credit losses during monitoring and credit risk assessment in commercial banks. In this regard, it becomes important to conduct a comprehensive systematization of the existing Russian and international practices for monitoring and evaluating credit risk in commercial banks. The purpose of the study is to develop a comprehensive approach to the use of an effective model for the impairment of expected losses in banking activities. The novelty of the study includes the enhancement of the tools for the forecast assessment of the expected credit losses among the commercial banks’ clients to improve the credit risk management efficiency. The results from the implementation of IFRS 9 Financial Instruments in the banking area show that modern conditions maintain the uncertainty of the long-term impact of the credit risk on the commercial banks’ performance. What is more, a huge amount of additional information gives significant difficulties, which contributes into the sophisticated calculations of the future credit losses of the banks. It has been justified that a forecast assessment model for the expected credit losses of the clients during the monitoring and bank’s credit risk assessment should be based on the collective or individual ground. The efficient application of the expected losses impairment in the banking performance has been described as a fundamental tool to simulate the expected credit losses to provision for impairment. This model has been shown to be determined by the features of the credit activities and bank portfolio, types of its financial tools, sources of the available information, as well as the applied IT systems. The proposed model validation algorithm for the expected impairment losses could reduce the expected credit losses, decrease the volume of the created assessed reserves, as well as improve the overall commercial bank performance efficiency. Theoretically, the study develops the credit losses risk management in the context of the transformations in the global and Russian banking practices. From the perspective of the practical value, the research gives an opportunity to create an efficient forecast assessment model for the expected credit losses of the commercial banks’ clients, this model contributing into the cost effectiveness of the bank’s credit activities. A promising further research is considered to be aimed at developing the tools for the assessment of the commercial banks’ credit activity results in the context of the adopted changes connected with the introduction of IFRS 9 Financial Instruments in the Russian banking sector.

scholarly journals Does Accounting Influence Finance? The Case of IFRS 9 and Fuel Hedging

2021 ◽  
Vol 16 (12) ◽  
pp. 1
Author(s):  
Francesco Bellandi
Keyword(s):  
Management Practice ◽  
Accounting Standards ◽  
International Accounting Standards ◽  
Accounting Standard ◽  
Time Value ◽  
Hedge Accounting ◽  
Other Comprehensive Income ◽  
Ias 39 ◽  
Ifrs 9 ◽  
Effectiveness Assessment

Finance does influence accounting, for example it is known that hedge accounting under International Accounting Standards Board (IASB) (2019), IFRS 9 has been more aligned to risk management practice. Although, as commonly held, accounting represents the substance of economic events without modifying them, opportunities offered by a new accounting standard may affect finance strategies. This paper studies how the IASB (2019), IFRS 9 hedge accounting requirements versus IASB (2014), IAS 39 have modified fuel hedging practice for a sample of IFRS airlines. Hedge accounting under the new standard results to have been adopted by a very large proportion of the sample. Its new features of risk component hedges, accounting for time value of option, forward points, or basis spread in other comprehensive income (hereafter, OCI), and simplified effectiveness assessment have been exploited by most of the sampled companies, although a definite explanation as an accounting strategy is only partially disclosed. In a context where fuel cost is one, if not the most significant caption of operating expenses of airlines, IASB (2019), IFRS 9 has provided an incentive to expand the use of fuel hedging, at least for accounting purpose.

Is IFRS 9 better than IAS 39 for investors' decisions? Evidence from the European context at the beginning of the transition year

2020 ◽  
pp. 125-148
Author(s):  
Alessandro Mechelli ◽  
Vincenzo Sforza ◽  
Riccardo Cimini
Keyword(s):  
Value Relevance ◽  
Fiscal Year ◽  
International Accounting ◽  
Financial Instruments ◽  
Reporting Standard ◽  
Accounting Standard ◽  
Ias 39 ◽  
Ifrs 9 ◽  
Retained Earnings ◽  
International Accounting Standard

The first-time adoption of International Financial Reporting Standard (IFRS) 9 at the beginning of fiscal year 2018 has offered the opportunity to test whether the information provided by this new accounting standard on financial instruments is more useful for investors than International Accounting Standard (IAS) 39. This paper assesses and compares the value relevance of book value calculated ac-cording to the requirements of the two accounting standards on financial instru-ments at the beginning of the transition year for a sample of 110 financial entities listed in 20 stock markets that have recorded transition effects between retained earnings. Findings provide evidence that both IAS 39 and IFRS 9 are value rele-vant and that the second one adds more information than that previously supplied by the first one. The paper contributes to the literature by providing the first evi-dence of the usefulness of the new accounting standard on financial instruments. About its practical implications, the paper provides insights regarding the high quality of the International Accounting Standard Board (IASB)'s standard setting process.

scholarly journals The effect of corporate governance and investor protection environments on the value relevance of new accounting standards: the case of IFRS 9 and IAS 39

2020 ◽  
Author(s):  
Alessandro Mechelli ◽  
Riccardo Cimini
Keyword(s):  
Corporate Governance ◽  
Value Relevance ◽  
Investor Protection ◽  
Accounting Standards ◽  
Accounting Quality ◽  
High Quality ◽  
Firm Level ◽  
Ias 39 ◽  
Ifrs 9

AbstractThe first-time adoption of IAS/IFRS accompanied by the issuance of new international accounting standards has provided mixed results regarding their ability to improve accounting quality. A possible reason is that not only the quality of the standard-setting process, but also other factors might affect accounting quality and one of its dimensions, namely, value relevance. By analysing data from a sample of 316 financial entities listed in 43 countries from all over the world and adopting IFRS 9 in place of IAS 39 as of 1st January 2018, this paper tests whether the quality of firm-level corporate governance and country-level investor protection environments affects the value relevance of equity values calculated according to the requirements of IFRS 9 and IAS 39. The results suggest that, despite both accounting standards providing investors with value relevant information, in the presence of high-quality corporate governance or a high-quality investor protection environment, IFRS 9 is more value relevant than IAS 39, whereas the opposite is true in the presence of low-quality corporate governance or a low-quality investor protection environment. The research results provide the first empirical evidence of the value relevance of the new accounting standard on financial instruments and contribute to the debate on the existence of other factors that, together with the quality of the IASB standards, affect the quality of financial reporting.

scholarly journals ANALISIS PENERAPAN PSAK 50 DAN PSAK 55 ATAS CADANGAN KERUGIAN PENURUNAN NILAI

2014 ◽  
Vol 8 (3) ◽  
Author(s):  
Yusni Husain ◽  
Jullie J. Sondakh ◽  
Heince Wokas
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Financial Statements ◽  
Financial Accounting ◽  
Financial Assets ◽  
International Accounting Standards ◽  
Financial Instruments ◽  
Financial Accounting Standards Board ◽  
Financial Reporting Standards ◽  
Ias 39

The application of the new accounting standards that are influential in the banking convergence with International Financial Reporting Standards and International Accounting Standards discussed in (IAS) 39 on recognition and measurement of financial instruments. Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) 50 and 55 of the Presentation, Recognition and Measurement of Financial Instruments will be effective on January 1, 2012. Allowance for Impairment (Impairment Loss) is derived from the value of the amount to be recorded at recoverable value of the asset. This research was conducted at PT. Bank Mandiri Unit 1 Datulolong Lasut Manado (Persero) Tbk . The purpose of this study was to determine the extent of the application of SFAS 50 and SFAS 55 to the recognition, measurement and presentation of the allowance for impairment losses PT. Bank Mandiri Unit 1 Datulolong Lasut Manado (Persero) Tbk. The results suggest the application of SFAS 50 and SFAS 55 top Allowance for Impairment Losses by PT Bank Mandiri Tbk. compliance with applicable standards.The process of recognition of Allowance for Impairment Losses at amortized value using the effective interest rate. Measuring the level of collective impairment for financial assets is calculated based on the loss historical collectively. Presentation of receivables in the financial statements is the value after deducting the allowance for impairment losses.

scholarly journals Approaches to Building Default Probability Models for Financial Instruments of Project Financing at Long Time Horizons

2021 ◽  
Vol 15 (4) ◽  
pp. 66-87
Author(s):  
Alfia Vasilieva
Keyword(s):  
Credit Risk ◽  
Financial Reporting ◽  
Commercial Banks ◽  
Financial Instruments ◽  
Project Financing ◽  
Reporting Standard ◽  
International Financial Reporting Standard ◽  
Time Horizons ◽  
Ifrs 9

  Project financing is one of the priority tools for stimulating the country's economic growth around the world, which allows the implementation of large-scale and capital-intensive projects, providing favorable credit conditions with insufficient creditworthiness of the project beneficiaries [1]. As a rule, project financing instruments are long-term (10-30 years, depending on the type of transaction), so this asset class is interesting for the implementation of the task of building long-term models for assessing credit risk associated with the introduction in 2018 of the new international financial reporting standard IFRS 9 "Financial Instruments". The new standard requires financial institutions to calculate their expected credit loss (ECL) at the time of granting loans and other banking products exposed to credit risk [2], taking into account different time horizons, which significantly changes the traditional approaches to assessing credit risk by commercial banks [3], [4]. As part of this work, a model was built to assess the long-term probability of default for the portfolio of assets of a Russian commercial bank belonging to the project finance segment in accordance with the requirements of the International Financial Reporting standard IFRS 9 "Financial Instruments". At present, the topic of this work is extremely relevant and may be of interest both for commercial banks that are faced with the problem of improving credit risk assessment models  

Business Model Literature Overview

2014 ◽  
pp. 79-130 ◽  
Author(s):  
Ales Novak
Keyword(s):  
Business Model ◽  
Financial Reporting ◽  
Business Models ◽  
Potential Role ◽  
Financial Instruments ◽  
Business Logic ◽  
Literature Overview ◽  
Ifrs 9 ◽  
Definition Of

The term ?business model' has recently attracted increased attention in the context of financial reporting and was formally introduced into the IFRS literature when IFRS 9 Financial Instruments was published in November 2009. However, IFRS 9 did not fully define the term ‘business model'. Furthermore, the literature on business models is quite diverse. It has been conducted in largely isolated fashion; therefore, no generally accepted definition of ?business model' has emerged. Therefore, a better understanding of the notion itself should be developed before further investigating its potential role within financial reporting. The aim of this paper is to highlight some of the perceived key themes and to identify other bases for grouping/organizing the literature based on business models. The contributions this paper makes to the literature are twofold: first, it complements previous review papers on business models; second, it contains a clear position on the distinction between the notions of the business model and strategy, which many authors identify as a key element in better explaining and communicating the notion of the business model. In this author's opinion, the term ‘strategy' is a dynamic and forward-looking notion, a sort of directional roadmap for future courses of action, whereas, ‘business model' is a more static notion, reflecting the conceptualisation of the company's underlying core business logic. The conclusion contains the author's thoughts on the role of the business model in financial reporting.

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