SOCPA Shares its Comments on the Request for Information Document Published by IASB
The International Accounting Standards Board (IASB) has published a Request for Information document concerning the impairment requirements for financial instruments under IFRS 9 "Financial Instruments", as part of the post-implementation review of the standard. In its response, SOCPA has expressed that although the impairment requirements in the standard lead to the early recognition of credit losses and provide useful information to financial statement users, these requirements incur high costs. These costs are associated with data collection and management, the use of analytical models, and the necessity for a high level of specialized automated systems.
SOCPA suggested that it would be appropriate for the IASB to reconsider the impairment requirements to reduce complexities related to the measurement duration and the application of the expected loss model. This reconsideration should address the lack of clarity regarding the period in which the loss will occur within the life of the financial instrument. SOCPA also noted the importance of establishing clear criteria for assessing what constitutes a significant increase in credit risk.
For detailed insights into SOCPA's perspective, please click here.