Details
- Supervisors
- Faculty
- Degree label
- Abstract
- On the 1st of January 2018, a new accounting standard called IFRS 9 – Financial Instruments came into effect. This new standard replaced most of the existing standard, IAS 39 – Financial Instruments: Recognition and Measurement. This new standard has had wide-ranging consequences on the Belgian banking sector due to its complexity. This thesis studies the impact of IFRS 9 on issues such as accounting accuracy, transparency, and comparability before moving on to study the impact of each of IFRS 9's three phases. Finally, it addresses the implementation and governance that is necessary for Belgian banks to comply with the standard. The findings of this thesis are the following: 1. The impact on accuracy, transparency, and comparability are not easily assessable. As implementation isn't entirely complete (and a lot of work will be done over the upcoming years), it is currently impossible to draw a definitive assessment of IFRS 9's impact on these matters. 2. IFRS 9's Phase I (which dictates the Classification and Measurement of financial assets) has had a significant impact on the accounts of Belgian banks and has been, in some cases, challenging to implement. Phase II (linked to the Impairment of financial assets) has been the most complicated to implement due to the evolution from an Incurred Loss (under IAS 39) to an Expected Credit Loss model under IFRS 9. This Expected Credit Loss model is expected to improve provisioning of banks for credit losses. Phase III (which covers Hedge Accounting) hasn't been implemented in most banks as this part of the standard isn't complete yet. 3. Finally, the implementation and governance of IFRS 9 have represented a significant burden on Belgian banks due to the complexity of the new standard. Governance will remain a key point in the upcoming years due to the fact that the implementation of the standard will be significantly improved over the upcoming years.