Financial Services Ireland

IASB and regulators highlight IFRS 9 ECL requirements during pandemic

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IASB and regulators highlight IFRS 9 ECL requirements during pandemic

The impact of the coronavirus pandemic is evolving rapidly. In March, we issued ‘Applying IFRS, Accounting considerations of the coronavirus outbreak’. Since then, a number of prudential and securities regulators, including the European Banking Authority (EBA), the European Central Bank (ECB), the European Securities and Market Authority (EMSA) and the Prudential Regulation Authority (PRA) in the UK (the ‘regulators’) have published guidance on the regulatory and accounting implications of the pandemic.

On 27 March 2020, the International Accounting Standards Board (the IASB or the Board) published a document for educational purposes, to help support the consistent application of accounting standards.1 The Board indicates that they have engaged closely with the regulators named above to encourage entities to consider that guidance. Therefore, this publication considers the regulatory guidance in addition to the points made by the Board. The Board emphasises that IFRS 9 Financial Instruments does not set bright lines or a mechanistic approach to determining when there is a significant increase in credit risk (SICR), nor does it dictate the exact basis on which entities should determine forward-looking scenarios to measure expected credit losses (ECLs).

What you need to know:

  • The IASB has published educational material on the measurement of ECLs during the pandemic that is broadly consistent with the guidance given by a number of regulators.
  • It emphasises that IFRS 9 should not be applied mechanically and prior assumptions may no longer hold true in the current environment.
  • Relief measures, such as payment holidays, will not automatically lead to loans being measured on the basis of lifetime losses and considerable judgement will be needed to measure ECLs at this time.

Download the document below for full details including our view, and reach out if you have any questions. You can also explore other recent insights and thinking to support you in leading through these volatile times. 

Thought Leaders


Danny Buckley

Partner, CFO Advisory

Dermot Keegan

Partner, CFO Advisory

Martina Keane

Head of Assurance - Financial Services Ireland






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