Universität zu Köln

Orthaus, Selina and Rugilo, Daniel (2023). Revisiting Constituents' Reflections on the Incorporation of Day-one Losses into IFRS 9. Account. Eur., 20 (1). S. 64 - 91. ABINGDON: ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD. ISSN 1744-9499

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Abstract

IFRS 9 requires the recognition of expected credit losses from the inception of a financial instrument, resulting in so-called day-one losses. The incorporation of day-one losses caused considerable controversy among the IASB members and its constituents. With a focus on the constituents' positions and reasoning, this study portrays the discussions held in the comment letters received by the IASB during the drafting process. We find that most constituents initially rejected day-one losses as conceptually unsound and/or as inappropriately affecting investors' and preparers' decision-making. Despite these continuing concerns, the majority of constituents eventually accepted day-one losses as a pragmatic approximation of expected credit losses in the absence of superior alternatives. Considering the technical and political nature of standard setting, our analysis provides insights into the constituents' assessment of departures from the Conceptual Framework and the constituents' views on the standard setters' responsibilities regarding financial stability after the financial crisis.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Orthaus, Selina UNSPECIFIED UNSPECIFIED UNSPECIFIED Rugilo, Daniel UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-657929
DOI:	10.1080/17449480.2022.2130703
Journal or Publication Title:	Account. Eur.
Volume:	20
Number:	1
Page Range:	S. 64 - 91
Date:	2023
Publisher:	ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
Place of Publication:	ABINGDON
ISSN:	1744-9499
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language CONCEPTUAL-FRAMEWORK; ACCOUNTING STANDARD; LEGITIMACY Multiple languages Business, Finance Multiple languages
URI:	http://kups.ub.uni-koeln.de/id/eprint/65792