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.


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