Several prudential and regulatory bodies have issued comments on the IFRS 9 application in the current environment.
Their joint feature is a call to carefully consider judgements and estimates that are going to be made avoiding mechanic application of current IFRS 9 models and methodologies. Among them are European Securities and Markets Authority (ESMA) and European Banking Authority (EBA) that made public statements on the IFRS 9 accounting and risk related treatment of various government aid measures and other issues related to COVID-19. Application of all these measures should be carefully considered under the IFRS 9 requirements. Banks are called to use flexibility embedded into the accounting and regulatory frameworks in order to maintain soundness. The considerations are equally relevant in the Serbian banking environment due to introduced “moratoria” for all credit commitments.
Our Risk consulting team will keep assessing and informing you how banks are affected by this crisis. Please find below our document ESMA&EBA response to Covid-19.