The proposals included in this publication relate to two areas of financial reporting which are very close to the heart of most financial institutions: interest margin and credit losses. They are key performance indicators and, in the case of impairment, intrinsically part of internal risk management and the measure of regulatory capital. The proposals contained in the ED represent a significant change to the current requirement on recognition of impairment losses for financial assets and their presentation and disclosure in the financial statements. The proposals also would impact the calculation of amortised cost, application of the effective interest method, and in particular, presentation of interest on the face of the statement of comprehensive income.
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