Abstract
This paper presents the main principles of the IFRS 9 accounting standard, which requires banks to estimate expected credit losses since 2018. The new standard is expected to change the flow of loan loss provisions, which are expected to be unstable, more volatile, and much more unpredictable than under the previous standard IAS 39, empirically tested on a sample of eight largest Czech banks according to their balance sheet volume. The hypothesis that the implementation of IFRS 9 causes increased volatility of loan loss provisions is confirmed in the case of five banks and within the whole sample of banks at a 5% probability level.
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Acknowledgments
This paper has been prepared under the financial support of grant “Development trends in financial markets” IG102029 and GAČR 18-05244S, which the authors gratefully acknowledge.
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Pastiranová, O., Witzany, J. (2022). Does IFRS 9 Increase Volatility of Loan Loss Provisions?. In: Procházka, D. (eds) Regulation of Finance and Accounting. ACFA ACFA 2021 2020. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-99873-8_19
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DOI: https://doi.org/10.1007/978-3-030-99873-8_19
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