FFA Working Papers 3:003 (2021)967

IFRS 9 AND IT´S BEHAVIOUR IN THE CYCLE: THE EVIDENCE ON THE EU COUNTRIES

Oµga Pastiranová, Jiří Witzany
Faculty of Finance and Accounting, Prague University of Economics and Business

The purpose of this paper is to empirically analyse the behaviour of expected loan loss provisions during the economic cycle. Provisioning rules under IFRS 9 require creation of the expected credit losses, which have been anticipated to behave countercyclically, and so replaced the rules under IAS 39 widely presumed to have procyclical impact. Observing the dynamics of the economic cycle during the economic downturn resulting from the COVID restrictions, a panel regression has been performed to test the hypothesis that loan loss provisioning rules under IFRS 9 have procyclical impact. The hypothesis was confirmed within the period of 1Q 2015 – 3Q 2020 on the sample of the member countries of the European Union.

Received: April 16, 2021; Revised: May 2, 2021; Accepted: May 4, 2021; Published online: January 1, 2021  Show citation

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Pastiranová, O., & Witzany, J. (2021). IFRS 9 AND IT´S BEHAVIOUR IN THE CYCLE: THE EVIDENCE ON THE EU COUNTRIES. FFA Working Papers, 3, Article 2021.003. https://doi.org/10.XXXX/xxx.2021.002
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