Regulatory treatment of accounting provisions – interim approach and transitional arrangements
This BCBS document sets out the Basel Committee’s considerations for retaining the current regulatory treatment of accounting provisions for an interim period. It also sets out the transitional arrangements to take effect from 1 January 2018 and the corresponding Pillar 3 disclosure requirements. Jurisdictions may adopt transitional arrangements to smooth any potential significant negative impact on regulatory capital arising from the introduction of expected credit loss (ECL) accounting. International Financial Reporting Standard (IFRS) 9 will take effect on 1 January 2018 (earlier application is permitted). The current expected credit losses (CECL) model will take effect on 1 January 2020 for certain banks that are public companies and in 2021 for all other banks, with early application permitted for all banks in 2019.