 Revisiting Constituents’ Reflections on the Incorporation of Day-one Losses into IFRS 9Selina Orthaus and Daniel Rugilo Accounting in Europe, 2023, vol. 20, issue 1, 64-90 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. Date: 2023 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:acceur:v:20:y:2023:i:1:p:64-90 Ordering information: This journal article can be ordered from DOI: 10.1080/17449480.2022.2130703 Access Statistics for this article Accounting in Europe is currently edited by Lisa Evans More articles in Accounting in Europe from Taylor & Francis Journals |
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