Impairments of Greek Government Bonds under IAS 39 and IFRS 9: A Case Study
|Publication:||White Paper No. 30|
|Topic Area:||Financial Markets|
|Keywords:||government bonds, IFRS 9, credit losses|
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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