Preliminary impact of IFRS 9 implementation on the Lebanese banking sector

Dib, Darine; Feghali, Khalil

doi:10.24818/jamis.2021.03001

Cited by 6 publications

(3 citation statements)

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“…Indeed, there exist very few papers in respect to IFRS 9 in the past few years, indicating that IFRS 9 performance estimation is still in its infancy. In this order that are early indication that the banking sector in Lebanon is not expected to display a material decrease in their equity as a result of the first-time adoption of IFRS 9 (Dib and Khalil, 2021).…”

Section: Theoretical Background and Literature Reviewmentioning

confidence: 85%

Financial sector and outbreak of the economic crisis in 2008: IFRS versus US GAAP

Rouvolis

2022

JCMS

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PurposeTesting a total of five hypotheses, the paper contributes to overall comparison of the two regimes, as it scrutinises whether these improvements have helped regulate this sector. Although it appears that, for the first time, International Financial Reporting Standards (IFRS) had a more timely effect than US Generally Accepted Accounting Principles (GAAP), multiple parameters must be taken into consideration. The banking system has additional rules that may affect financial statements, such as the Basel Accord which sets many policies closely related to the IFRS, such as deferred tax credits. In this way, this paper aim to enrich the results of these decisions, and illuminate aspects of amendments to IFRS and US GAAP in light of the crisis. Focussing on the financial sector, the author sought to critically evaluate their reactions, and to question some of their fundamental rules in practice. This is vital for accounting researchers and analysts, allowing for the first time to compare IFRS performance between Europe and the US, and make better investment evaluations.Design/methodology/approachThe study sought to detect whether IFRS and US GAAP protected firms from abnormal sales arising from the outbreak of the crisis, whether the reclassification option under IFRS was an answer to the crisis, and whether IFRS and US GAAP succeeded in regulating shadow banking through their amendments. Therefore, it processes five hypotheses. In order to detect the effects of the crisis on accounting regimes, the analysis focused only on companies from the financial sector composed of the banking industry, insurance companies and shadow banking. The author included firms from Australia, Germany, Greece, the UK and the US, and collected information on 679 financial institutions for the period 2009–2013. The author settled on these time frames because the author aimed to capture IFRS performance surrounding the crisis effects in 2008 and the amendments that followed. In this way, the author applied quantitative methods using only numerical data over a given period.FindingsThe results suggest that the reclassification option was successful, helping firms to perform better amid the crisis, indicating that the manipulation of the crisis was appropriate. It seems therefore that US GAAP should have activated this option for US firms. However, the US may not have hurried to act because its banking sector seemed to recover more quickly than in Australia and Europe. Either way, both regimes need to consider speculative market cases that might have appeared during the crisis, as the author have detected cases of abnormal returns. Finally, concerning regulation of the shadow banking sector, the results seem to be encouraging only with regard to the latest improvements and only for all countries examined.Originality/valueThe project contributes to debate on the reactions of both IFRS and US GAAP during and after the economic crisis. For this, it addresses several questions to investigate the performance of the financial sector under both regimes, identifying possible additional effects and considerations. More specifically, it answers if the fair value orientation actually contributes to the financial crisis through contagion effects, while it addresses additional questions. Have these two global accounting regimes succeeded in overcoming the consequences of the crisis? Have amendments and the introduction of new standards to IFRS and US GAAP achieved regulation of shadow banking? Which of the two has performed better? As aforementioned, the analysis focused only on companies from the financial sector composed of the banking industry, insurance companies and shadow banking firms from Australia, Germany, Greece, the UK and the US, for the period 2009–2013.

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Section: Theoretical Background and Literature Reviewmentioning

confidence: 85%

Financial sector and outbreak of the economic crisis in 2008: IFRS versus US GAAP

Rouvolis

2022

JCMS

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“…İlk grupta yer alan çalışmalar TFRS 9/UFRS 9 uygulamasının bankacılık sektörünün finansal tablolarına etkilerini inceleyen çalışmalardır. (Nadia & Rosa, 2014;Sultanoğlu, 2018;Casta vd., 2019;Loew vd., 2019;Karaaslan & Gülhan, 2020;Ã ‡ollaku vd., 2021;Dib & Feghali, 2021;Groff & Mörec, 2021;Pastiranová & Witzany, 2021;Telci, 2021;Mengı̇ vd., 2022). Bu grupta yapılan çalışmalar çoğunlukla geleneksel bankacılık sektörüne odaklanmaktadır.…”

Section: Genel Ve öZel Karşılıklar (Tfrs 9'un Uygulanmaya Başlanması ...unclassified

Katilim Bankalarinda Kredi̇lerden Ayrilan Karşiliklarin TFRS 9’a Göre Muhasebeleşti̇ri̇lmesi̇

GÜNGÖR

2022

Kırklareli Üniversitesi Sosyal Bilimler Meslek Yüksekokulu Dergisi

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Son yıllarda yaşanan ekonomik krizlerin ardından finansal araçların muhasebeleştirilmesi, sınıflandırılması ve raporlanması süreçlerini düzenleyen TFRS 9 Finansal Araçlar standardının kapsadığı yeni uygulamalar özellikle TFRS’ye göre raporlama yapmakla yükümlü olan katılım bankaları için de önem teşkil etmektedir. Standardın getirdiği yenilikler yatırımcılar, analistler, düzenleyiciler, denetçiler ve diğer paydaşlar açısından da gündem konulardan biri haline gelmiştir. Bu çalışmada katılım bankalarının kullandırdıkları kredilerin sınıflandırılması aktarılmıştır. Ayrıca, TFRS 9 öncesi ve sonrası bankacılık yönetmelikleri karşılaştırılmıştır. TFRS 9 uygulamasının yürürlüğe girmesiyle beraber kullanılmaya başlanan “beklenen kredi zararı” yaklaşımının muhasebeleştirilmesi süreci örneklerle açıklanmıştır.

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“…Several PD modelling approaches exist that may be considered as possible methodologies to derive the PD component for IFRS 9 purposes, although very few IFRS 9 PD methodologies exist in published academic literature. In spite of the expansion of research in respect to IFRS 9 in the past few years, it is still in its infancy in developing countries (Dib and Feghali 2021).The focus of the literature overview will be on retail portfolios and not wholesale portfolios, because some methodologies for wholesale portfolios are not applicable for retail portfolios (see e.g., (Gubareva 2021)).…”

Section: Literature Overviewmentioning

confidence: 99%

Development of an Impairment Point in Time Probability of Default Model for Revolving Retail Credit Products: South African Case Study

Breed

Jaarsveld²,

Gerken

et al. 2021

Risks

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A new methodology to derive IFRS 9 PiT PDs is proposed. The methodology first derives a PiT term structure with accompanying segmented term structures. Secondly, the calibration of credit scores using the Lorenz curve approach is used to create account-specific PD term structures. The PiT term structures are derived by using empirical information based on the most recent default information and account risk characteristics prior to default. Different PiT PD term structures are developed to capture the structurally different default risk patterns for different pools of accounts using segmentation. To quantify what a materially different term structure constitutes, three tests are proposed. Account specific PiT PDs are derived through the Lorenz curve calibration using the latest default experience and credit scores. The proposed methodology is illustrated on an actual dataset, using a revolving retail credit portfolio from a South African bank. The main advantages of the proposed methodology include the use of well-understood methods (e.g., Lorenz curve calibration, scorecards, term structure modelling) in the banking industry. Further, the inclusion of re-default events in the proposed IFRS 9 PD methodology will simplify the development of the accompanying IFRS 9 LGD model due to the reduced complexity for the modelling of cure cases. Moreover, attrition effects are naturally included in the PD term structures and no longer require a separate model. Lastly, the PD term structure is based on months since observation, and therefore the arrears cycle could be investigated as a possible segmentation.

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Preliminary impact of IFRS 9 implementation on the Lebanese banking sector

Cited by 6 publications

References 0 publications

Financial sector and outbreak of the economic crisis in 2008: IFRS versus US GAAP

Financial sector and outbreak of the economic crisis in 2008: IFRS versus US GAAP

Katilim Bankalarinda Kredi̇lerden Ayrilan Karşiliklarin TFRS 9’a Göre Muhasebeleşti̇ri̇lmesi̇

Development of an Impairment Point in Time Probability of Default Model for Revolving Retail Credit Products: South African Case Study

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