Accounting for Financial Instruments under IFRS 9 – First-Time Application Effects on European Banks’ Balance Sheets

2019 ◽  
Author(s):  
Edgar Loew ◽  
Lisa E. Schmidt ◽  
Lars F. Thiel
Keyword(s):  
Financial Instruments ◽  
Balance Sheets ◽  
European Banks ◽  
Ifrs 9 ◽  
First Time

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.

Issues and challenges of IFRS 9 in Malaysian Islamic financial institutions: recognition criteria perspective

2021 ◽  
Vol 12 (2) ◽  
pp. 239-257
Author(s):  
Marziana Madah Marzuki ◽  
Abdul Rahim Abdul Rahman ◽  
Ainulashikin Marzuki ◽  
Nathasa Mazna Ramli ◽  
Wan Amalina Wan Abdullah
Keyword(s):  
Financial Institutions ◽  
Financial Reporting ◽  
Business Models ◽  
Fair Value ◽  
Financial Instruments ◽  
Structured Interviews ◽  
Content Type ◽  
Reporting Framework ◽  
Islamic Financial Institutions ◽  
Ifrs 9

Purpose The purpose of this paper is to investigate the effects and challenges of the new amendment of International Financial Reporting Standards (IFRS) 9 in Malaysia from the perspectives of regulators, auditors, accountants and academicians in Malaysian Islamic financial institutions. For the purpose of this study, this paper focuses on the recognition criteria perspective of the standard, which provides a basic understanding of the financial reporting framework. Design/methodology/approach Using 10 series of semi-structured interviews undertaken with key individuals in regulatory bodies, audit companies, full-fledged Malaysian Islamic Banks and Malaysian higher learning institutions. Findings The findings revealed that IFRS 9 strengthens International Accounting Standards 39 in terms of relevance and reliability, recognition of financial instruments and identification of business models. Nevertheless, Islamic financial institutions face challenges in terms of a faithful representation of fair value, substance over form, identification of financial instruments before recognition criteria and the extent of the role of risk management in reducing manipulation in identifying business models. Research limitations/implications This study provides implications to regulators and standard setters in Malaysia to enhance the quality of financial reporting framework and practices in Islamic financial institutions in this country using IFRS 9. Practical implications Practically, the findings of this study can be used by the regulators to resolve the issues that arise in adopting IFRS 9 among Islamic financial institutions to further enhance financial reporting quality. Originality/value The findings of this study are very important to ensure that the adoption of IFRS among Islamic financial institutions are in line with Sharīʿah principles. To date, no studies have been done on the challenges of adopting IFRS 9 among Islamic financial institutions in Malaysia.

scholarly journals New accounting rules for the recognition and measurement of financial instruments: Some issues implied by the IFRS 9

2015 ◽  
Vol 17 (4) ◽  
pp. 91-105 ◽  
Author(s):  
Goranka Knežević ◽  
Vladan Pavlović ◽  
Simo Stevanović
Keyword(s):  
Financial Instruments ◽  
Accounting Rules ◽  
Ifrs 9

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 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 Domestic Responses to Free Trade and Free Finance in OECD Countries

1999 ◽  
Vol 1 (3) ◽  
pp. 279-316 ◽  
Author(s):  
Daniel Verdier
Keyword(s):  
Free Trade ◽  
Small Firms ◽  
Oecd Countries ◽  
The State ◽  
Financial Instruments ◽  
Modern History ◽  
Demand And Supply ◽  
State Institutions ◽  
Banking And Finance ◽  
First Time

For the first time in modern history, free trade coexists with free finance. Free trade and free finance (defined as the deregulation and internationalization of banking and finance) are not mutually reinforcing, but cause a mismatch between the demand and supply of financial instruments. Investors want more marketable instruments whereas entrepreneurs want more transaction-specific instruments. This mismatch potentially hurts small firms and local interests most. What can they do about it? It depends on state institutions. The more centralized the state, the fewer opportunities available to potential losers to curb free finance. Free finance is most successful in centralized countries, where resistance to free finance is least strongly felt. This hypothesis is systematically tested on a sample of OECD countries.

scholarly journals EU Debt Crisis and Contagious Effect via Transmission Mechanisms: Possible Effects on Turkey

2013 ◽  
Author(s):  
Mustafa Kemal Topcu ◽  
Poyraz Gürson ◽  
Halil İbrahim Ülker ◽  
Turan Erman Erkan
Keyword(s):  
Debt Crisis ◽  
Foreign Debt ◽  
Financial Policies ◽  
Growth Trend ◽  
Balance Sheets ◽  
Transmission Mechanisms ◽  
The Us ◽  
European Banks ◽  
Trade Partner ◽  
Maastricht Criteria

The common features of the crises, which are resulted from global crisis rooted from the US and emerged in Euro Zone sequentially, are the rate of public debt and budget deficit of GNP far from reflecting Maastricht criteria. Beginning in Greece in 2009, it has been seen in Ireland, Italy, Portugal, and Spain in a recent time. Although money union is established, leaving financial policies to country’s own initiative resulted in unsolved problems. Seeking solutions with IMF led to some sustainability programs. However, expectations show that debts will not be overcome for a long period. Towards this end, it is possible for Turkey to be affected since European Union is her biggest trade partner. There is a general consensus on that trade and credit channel of transmission mechanisms would affect Turkey. Export preserves its level at 55%. Likewise, a large part of foreign debt of Turkey is to European banks. Furthermore, sustainment of the recent growth trend of Turkey requires new funds. In case European banks strengthen their capital by means of downsizing their balance sheets as a restructuring, Turkey may be in a challenging position.

Global M&A activity seen holding up in 2016

2016 ◽  
Keyword(s):  
Initial Public Offerings ◽  
The United States ◽  
Investment Banks ◽  
Content Type ◽  
Public Offerings ◽  
The Third ◽  
Systemic Risks ◽  
European Banks ◽  
Strong Performance ◽  
First Time

Subject Trends in global M&A activity. Significance The global sell-off of banking stocks today underlines the importance to investment banks' earnings of merger and acquisition (M&A) activity staying buoyant. Global M&A activity increased in 2015 for the third straight year, topping 5.0 trillion dollars for the first time, according to Dealogic. This is up 37% from 3.7 trillion dollars in 2014 and bests the record set in 2007. M&A fees boosted US banks' earnings, partly offsetting trading losses in volatile markets and the slowdown in initial public offerings (IPO). Results for European banks lagged. Impacts Shareholders will want strong performance, putting pressure on banks to create deals, especially in bearish global equities markets. Bank stocks will underperform, due to market concerns over fundamentals and lurking systemic risks. The United States is likely to retain its ranking as top M&A region in 2016.

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