Review Article Open Access
This study explores the literature about definitions and concepts when a significant increase in credit risk is
achieved. In response to the financial crisis the IASB has introduced a new standard (IFRS 9) on impairment, which requires a three-step approach, which in general replaces the current incurred impairment model with a new expected loss model. This research paper summarizes alternative impairment models and particuarly focus on the significant detreortaion criteria, which is a corner stone of the new IFRS 9 impiamrnet model. The expected loss model is not completely new within the accounting literature. The study provides early insights into implemention of IFRS 9 on impairment, as IFRS 9 will become applicable 2018. It is also relevant for regulators, as it becomes obvious due to the non-existance of a dominant approach; the question arises if the regulator should provide more guidance to avoid that all companies purse completely different model resulting in decreasing comparability for investors.
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Author(s): Beerbaum D
IFRS 9, Impairment, Credit risk, Accounting literature, Economic Capital, Financial Economics, Hospitality Management, Industrial and Management Optimization, Innovation Policy and the Economy, Socio-Economic Planning Sciences, Economic indicator, Total Quality Management (TQM),
Value based Management, Entrepreneurial Development, Management in Education, Classical Economics, Monetary Neutrality, Econometrics, New Economy, Welfare Economics, Development Economics, Economic Transparency, Globalisation, Game theory