Not bad, but should be better: The National Bank of Ukraine examined the banks’ preparation for IFRS 9
The National Bank of Ukraine (NBU) has noted positive developments in Ukrainian banks preparing for their transition to IFRS 9. The report published by NBU indicated that as of September 1, over a half of banks had already completed the preliminary assessment of their reserves for potential credit losses and also started developing IT-systems required to adopt the new accounting standards.
86% of the banks completed a preliminary classification of their financial assets, and 76% of them finished a business model assessment and the SPPI testing of financial assets.
That said, only 26% of the banks completed their Gap analysis assessing the IFRS impact on the size of valuation reserves, profit, and total capital. The development of loan loss models for financial liabilities was completed only by 39% of the banks.
Overall, NBU commended the situation on transitioning to the new accounting standards but emphasized the need to accelerate work in this area. For this purpose, the regulator recommends banks to better consolidate the management efforts of executives, managers, business units and IT departments.
This post is also available in: Russian