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ESMA report on application of IFRS 7 and IFRS 9 requirements for banks’ expected credit losses

  • ESMA (European Securities and Markets Authority) (dark gray) Image

15 Dec 2021

The European Securities and Markets Authority (ESMA) has published a report that provides (1) an overview of the principles and requirements in IFRS 7 and IFRS 9 related to the measurement and disclosure of expected credit losses (ECL) by European banks and (2) recommendations on how to improve the level of compliance, comparability and transparency of those requirements.

The report focuses on the following areas:

  • General aspects of the ECL-disclosures
  • Assessment of significant increase in credit risk
  • Forward-looking information
  • Explanation of changes in loss allowances
  • Transparency of disclosures on credit risk exposures
  • ECL sensitivity disclosures

For more information, see the press release on the ESMA website.

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