Banks grapple with IFRS 9 and CECL loan loss forecasting

Ambiguity in rules sets up potential clash between banks and auditors over “reasonable and supportable” projections

One small phrase is causing big headaches for banks subject to new accounting standards for credit loss provisioning: “reasonable and supportable”. The phrase refers to the information banks rely on when developing forecasts to determine whether loans on their books have suffered a material increase in credit risk between reporting periods.

For banks, a lot will turn on their definition of those words. It will directly affect the amount of loan loss reserves they need to set aside under IFRS 9

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here