Hensættelser til tab på usikrede lån: Konsekvensen ved skift fra “incurred loss” til “expected loss” når IAS 39 bliver til IFRS 9

Louise Bjørkmann & Jacob Green Rasmussen

Student thesis: Master thesis


In 2007 the world experienced a global financial crisis. In the years before 2007, the global economy was showing no sign of any major concerns or issues. Corporations were experiencing growth, expanding, hiring people and delivering great financial results. The general public was riding the wave of these great times. The unemployment rates were at an all-time low, housing prices were high as never before, and interest rates were kept at a low rate. When the financial crisis rolled in, it hit the world harder than anyone would ever imagine. It all started when a few banks were questioning other banks, their need for liquidity, and their underlying loan portfolios. At the end they were refused funding, and several banks collapsed as they could not provide funding for their customers, who in return defaulted on their loans. When corporations were suddenly refused new funding or an extension of their line of credit, they were either forced to file for bankruptcy, or to cut back elsewhere. This meant layoffs, profit turned to loss, and again they defaulted on their obligations with their bank or funding provider. By defaulting on their obligations, the banks were suffering great losses, and in some cases, individual corporations brought down entire banks. Main reason: no one had expected a global financial crisis like this, and no one questioned how long the economic upturn experienced all the way up through the 2000’s would continue. This resulted in losses on financial assets that were not adequately provided for. The financial industry was not holding back on claiming the International Accounting Standards for being the ones to blame. The IAS 39, which describes how financial assets are recognized and measured, does not allow provision for losses that have not occurred. It is based on an “incurred loss”-model which in short terms only allows for loss provisions based on historical data. During a financial upturn like the world experienced in the 2000’s, all historical data was looking good – there was no way an “incurred loss”-model would have been able to predict the downturn seen in 2007. After the financial crisis, the IASB quickly started the work on IFRS 9 - a new standard which would phase out the IAS 39. One of the main purposes was to simplify the standard, and change the “incurred loss”- model to an “expected loss”-model, which would allow the users of the accounting standard to better provide for losses. This time it would be based on a mix of historical data and future estimates. This thesis will focus on the shift from IAS 39 to IFRS 9 by describing the differences, the major changes, and finally give examples of how the IFRS 9 can be implemented once approved by the EU. As the IFRS 9 is yet to be fully accepted by the EU, this thesis will serve as a preparation tool for financial corporations which are currently using the IAS 39 in their financial statement. Our aim with this thesis is to help make this transition as easy and smooth as possible.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2011
Number of pages115