Financial Risk Forecasting

Using IFRS 9

Do you need support to understand IFRS 9 accountancy standards and how it affects loss forecasting? Our analytics experts can help.

As of 1st January 2018, IFRS 9 accountancy standards will replace IAS 39. What does this mean for businesses when it comes to loss forecasting? How can we help to support the transition from IAS 39 to IFRS 9?

The International Financial Reporting Standard (IFRS) 9 will see businesses making significant changes to the way expected credit losses are calculated. As a specialist in loss forecasting and impairment, Experian can work with you on a consultative basis to build and deliver a comprehensive approach to the new standards.

IFRS 9 – Key Changes

  • Finance and credit risk teams will need to work together to forecast losses
  • Using a loss forecasting approach that leverages credit risk models used for managing the portfolio and embedding economics within these models
  • Determination of what constitutes a significant change in credit risk
  • A move from 12-month to lifetime losses when this has occurred
  • The requirement to build a forward-looking forecast of future economic conditions when identifying significant changes in credit risk and in models for expected credit losses

We can support you in anticipation of the accountancy standard change with an end to end solution covering four areas. This does vary however, from business to business, because your business is unique and our solutions can be tailored to your business requirements. Your loss forecasting methodology depends on whether you are under Advanced IRB or Standardised accounting standards, whether you have sufficient relevant historical data internally to support modelling lifetime losses and whether your lending policy or collections strategy has changed significantly in the recent past.

Contact us and discover how we can help your business thrive

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