IFRS 9 impairment – Revolving credit facilities

IFRS 9 impairment – Revolving credit facilities

This IFRS newsletter reports on the latest discussions on impairment of financial assets.


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We report on the discussion on IFRS 9 impairment at the IASB's February 2017 meeting.

When measuring expected credit losses under IFRS 9 for revolving credit facilities – such as credit cards – determining the period of exposure presents challenges.

The IASB discussed this issue – which was previously raised by the ITG
at its February meeting. Read Issue 4 of our IFRS Newsletter: IFRS 9 Impairment for more detail on the discussions.

Three factors to consider

The IASB staff provided a summary of the relevant requirements of
IFRS 9 and observations made by ITG members’ at their previous meetings.
This included the following.             

  • In determining the period of credit exposure an entity is required to consider all three factors listed in paragraph B5.5.40 of IFRS 9 – i.e. the entity considers if and how its credit risk management actions affect the period of exposure.     
  • If an entity chooses not to take credit risk-mitigating actions on some instruments, then this decision affects the expected life of the related financial instrument.
  • An entity is required to consider the effects of its credit risk management actions to the extent that they mitigate credit risk

Next steps

The staff informed the Board of their intention to develop educational material on this and other challenging areas – should the need arise – to support IFRS 9 implementation.

Find out

Visit our IFRS Newsletters page for access to our latest newsletters on a range of major IFRS topics, including financial instruments and IFRS for banks and insurers.

And go to our IFRS – Financial instruments and IFRS for banks hot topics pages for more on these and other aspects of financial instruments accounting under IFRS.

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