Skip to main content


IFRS 9 Expected Credit Losses and COVID-19

April 6, 2020 News

In light of the current uncertainty resulting from COVID-19 pandemic, the Accounting Standards Board (AcSB) commends the International Accounting Standards Board (IASB) for issuing guidance on applying IFRS 9 Financial Instruments. This guidance highlights IFRS 9 requirements companies should consider when estimating the expected credit losses (ECL) during this uncertain period.

The AcSB also welcomes the recent adjustments to capital and liquidity regulatory requirements provided by the Office of the Superintendent of Financial Institutions (OSFI) and its guidance on accounting for ECL, which is consistent with the requirements in IFRS 9.

IASB: Application of IFRS 9 in the light of the coronavirus uncertainty

On March 27, 2020, the IASB released a document, Application of IFRS 9 in the light of the coronavirus uncertainty, which covers accounting for ECL applying IFRS® Standards. The document highlights the importance of incorporating all reasonable and supportable information available when determining whether lifetime losses should be recognized on loans and in measuring ECL.

OSFI announces regulatory flexibility to support COVID-19 efforts

Also, on March 27, 2020, OSFI announced a series of regulatory adjustments. These included adjusting a number of regulatory capital, liquidity and reporting requirements to help reduce some of the operational stress on financial institutions.

In addition to these regulatory adjustments, OSFI provided application guidance on three aspects of accounting for ECL in extraordinary circumstances: significant increase in credit risk, reasonable and supportable forward-looking information, and disclosure. This guidance is consistent with the requirements in IFRS 9 and should be considered along with the guidance provided by the IASB on the application of the standard in relation to COVID-19.

Key Contact

Linda F. Mezon, FCPA, FCA, CPA (MI)
Chair, Canadian Accounting Standards Board
Phone: +1 (416) 204-3490
Email: [email protected]