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Recenzirano
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Buesa, Alejandro; Población, Javier; Tarancón, Javier
Journal of financial services research, 12/2023, Letnik: 64, Številka: 3Journal Article
In this paper, we aim to compare the cyclical behavior of credit impairments in the P&L account under three accounting regimes: IAS 39, IFRS 9, and US GAAP with the CECL update. Our results show that although IFRS 9 is less procyclical than IAS 39, it remains more procyclical than CECL. The difference comes from accounting for the expected loss in one year in the case of IFRS 9, while CECL accounts for expected losses over their lifetime. This accounting comes at the cost of a large increase in provisions that occur primarily during longer contractionary phases. However, the length and shape of the cycle matter more under IFRS 9.
