Impairments of Greek Government Bonds under IAS 39 and IFRS 9: A Case Study

Publication: White Paper No. 30
Topic Area: Financial Markets
Authors: Günther Gebhardt
Date: Nov 2015
Keywords: government bonds, IFRS 9, credit losses
Abstract:

IFRS 9 introduces new impairment rules responding to the G20 critique that IAS 39 results in the delayed and insufficient recognition of credit losses. In a case study of a Greek government bond for the period 2009 to 2011 when Greece’s credit rating declined sharply, this study highlights the discretion that preparers have when estimating impairments. IFRS 9 relies more on management expectations and will lead to earlier impairments. However, these appear still delayed and low if compared to the fair value losses.

This document was provided by Policy Department A at the request of the Committee on Economic and Monetary Affairs of the European Parliament. It is part of a set of four papers on IFRS 9. It was originally published on the European Parliament’s webpage:


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