FEE broadly agrees with the principles for banks in the guidance proposed by the Basel Committee, on accounting for expected credit losses (ECL). This consultation outlines the regulator’s expectations of implementing the new ECL model under IFRS 9 across different jurisdictions. In that regard, FEE warns that there is a fine line between proposing guidance for new international standards and intervening in standard setting or interpretation. Regulators or other bodies should thus not take the role of the International Accounting Standards Board (IASB) or of the IFRS Interpretation Committee (IFRIC). FEE firmly believes that, with the European Union’s endorsement process for IFRS 9 still pending and the on-going work of the relevant IFRS Transition Resource Group, these proposed guidelines should not be viewed as tentative interpretations of IFRS 9.

More information:

• FEE President Petr Kriz comments on this subject in the Global Risk Regulator ‘Basel Committee weighs in on IFRS 9’ (Only for subscribers)
• FEE News Release (25 july 2014) : IASB completes the reform of financial instruments accounting
• FEE regularly comments on consultations by the Basel Committee, such as FEE comments on the BIS Consultative Document on External Audits of Banks (June 2013)
• For our other work on reporting and auditing issues for banks please see the FEE Banks Working Party

Relevant documents

FEE comments on Basel Committee’s consultation re guidance on accounting for expected credit losses