IFRS 9 adoption and its impacts on banks’ credit impairment: an international perspective

• Published in: Enfoque : reflexão contábil Vol. 43; no. 3; pp. 1 - 19
• Main Authors: Lima Ribeiro, Carlos William, De Santana Júnior, Jorge Luiz, Coppe Pimentel, Renê, Meirelles Salotti, Bruno
• Format: Journal Article
• Language: English; Portuguese
• Published: Universidade Estadual de Maringá 03.09.2024
• Subjects: IAS 39; IFRS 9; Credit Impairment; Bank; Value Relevance
• ISSN: 1984-882X; 1984-882X
• DOI: 10.4025/enfoque.v43i3.64183

Objective: This paper analyzes the initial impacts of IFRS 9 adoption on banks’ credit impairment level in an international perspective. Specifically, we analyze the impact on banks' financial position and performance, the bank- and country-specific determinants of the impairment magnitudes and the informational effects of the new standard.Method: The study is based on a sample of 149 listed banks from 12 countries from G20 and bivariate and multivariate analyses are applied.Results: Results indicate that credit impairment recognized under IFRS 9 is larger than under IAS 39, suggesting a more conservative accounting model and that the new standard affected banks’ performance and financial position. We show that IFRS 9 implementation was significantly different among countries, especially between high- and low-income countries and the information under IFRS 9 is more value-relevant than IAS39.Contributions: We add to the previous literature by documenting the initial impact of IFRS 9 implementation on financial statements and on value relevance, as well as the bank- and country-specific determinants of the level of this impact.