This research paper summarized alternative impairment models and particularly focus on the significant deterioration criteria, which is a cornerstone of the new IFRS 9 impairment model.

Whether one factor needs to be weighted more than another one needs judgment.

Therefore some safeguards need to be built into the process such as disclosures of methods applied and periodical back testing and immediate reflection of the results of the back testing in the models applied for the future.

are not required

Critics of the accounting standard argue that the recognition after identification of evidence, such as a counterparty failing to meet its contractual obligations, is much too late because the expenses in the income statement for impairments then accumulate in economic downturns when losses materialize.

This process of analyzing future cash flow streams is inherently subjective and represents potential to become susceptible for earnings management

. in “good times” a loan reserve is set-up so it will not face insolvency due to charge-offs and provisions in “bad times” [

be very volatile and clearly pro-cyclical

Fair value would include credit and noncredit related changes in fair value i.e. using market based values and discount rates.

However according to an empirical study about commercial banks they can draw an opposite conclusion that the introduction of IAS 39 in the past has mitigated earnings management behavior.

According to Leventis et al. [6] many researchers have concluded that loan loss provisioning is used as a tool for earnings management.

However according to Bushman and Landsman [5] it is not only a model change, but it also shows that regulation of financial reporting in light of the recent financial crisis needs to develop towards the prudent regulatory model. The reality is that the regulation of corporate reporting is just one piece of a larger regulatory configuration and that forces are at play that would “subjugate accounting standard-setting to broader regulatory demands” (p. 260). IFRS 9 illustrate this point.

The assumption is that prudent recognition of loan losses could have potentially decreased the cyclical moves in the recent financial crisis

Expected credit losses are the weighted average credit losses with the probability of default (‘PD’) as the weight

It is often misunderstood, as it is not the expected cash shortfalls over the 12-month period but the entire loss on an asset weighted by the probability that the loss will occur in the next 12 months.

A significant increase in credit risk could not be measured since the initial recognition.

The new model is very much influenced by prudent bank regulation and the aim to reduce income smoothing

These differing objectives are at the center of a standing debate over loan loss accounting as reflected in recent high profile proposals: Impairment of Financial Assets- The Expected Loss Model (EFRAG), Basel Committee on Banking Supervision, and Guidance on accounting for expected credit losses.

Dynamic provisioning applies an ant cyclical approach,

In contrast to this prudential bank regulation seeks to decrease the frequency and cost of bank failures and to protect the financial system as a whole by limiting the frequency and cost of systemic crises [1

The aims of accounting standard setting is substantially different to those of bank regulation.

Financial reporting follows as a general purpose to provide information to those outside the firm to support decision usefulness

Quand des experts remettent en cause, de manière triviale, des hypothèses scientifiques sur des plateaux de télévision ou dans des tribunes papier et en ligne, cela ouvre la porte à toutes les interprétations.

Outre la violence, l’objectif du radical ne vise-t-il pas à perturber ou à réduire, sinon aliéner la pensée de l’autre ?

logique transmédia