engleski

Accounting for expected credit losses - Croatian case

This paper discusses the results of application accounting for expected credit losses IFRS 9 model. Accounting for expected credit losses (AECL) should provide to users of financial statements useful information about an entity’s expected credit losses on its financial assets and commitments to extend credit. This field of accounting is substantial in banking business and it is inevitable to research AECL through its effect on banking business regulation. Although AECL was covered by accounting standards, last financial crisis has shown weak spots of the regulation. Delayed recognition of credit losses on loans (and other financial instruments) was identified as a main weakness in existing accounting for expected credit losses model. This is why accounting in this area has changed. Due to recognition of credit losses would decrease financial result and value of assets, banks have found solution through claims management companies so there is visible correlation of claims management business results growth and IFRS 9 introduction in Croatia.

Accounting, IFRS 9, expected credit losses, banking business

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