Migrating to IFRS 9: outlook and feasibility

IFRS 9, the new standard to be rolled out from January 2018, is intended to enhance the reliability of information on asset quality based on depreciated asset value, as well as the level of credit risk management. These issues are discussed in the article by Alexey Simanovsky, Adviser to the Governor of the Bank of Russia, titled ‘IFRS 9: opportunities and threats’, published in the December issue of Money and Credit. It presents an expert assessment of the concept, its enablers and potential risks related to the rollout of the standard.

In conclusion, the author emphasises the need for the continued use of prudential asset valuation methodologies for financial supervision purposes. In the author's view, the best solution to the problem of the two asset valuation methods used in parallel (prudential and accounting) could be a uniform standard which, once adopted, would integrate both methods. The article further looks into the complexities of integration; it also discusses options whereby the two approaches to asset valuation would co-exist in the foreseeable future.