The Central Bank of Nigeria (CBN) has issued an initial Guidance Note on the implementation of International Financial Reporting Standard 9 (IFRS), in...
The Central Bank of Nigeria (CBN) has issued an initial Guidance Note on the implementation of International Financial Reporting Standard 9 (IFRS), in the Nigerian banking sector to all financial institutions in the country.
The Guidance Note communicates supervisory expectations for the implementation of the new standard, especially in areas where banks are expected to exercise considerable judgment or elect to use simplifications and other practical expedients permitted under the standard.
The Note also specifies information to be submitted to CBN not later than April 30, 2017 on IFRS 9 Implementation Projects while requiring banks to submit monthly status updates on the implementation projects starting May 2017.
The CBN has also set up a project team where the banks are expected to seek clarifications with regards to the Guidance Notes.
“To ensure a seamless implementation, the CBN has established a Project Team and banks are encouraged to seek clarifications, if any, on the Guidance Notes by contacting the Project Manager, Mr. C. D. Nwaegerue, via email on firstname.lastname@example.org,” director of banking supervision in the CBN, Mrs. Tokunbo Martins said in a circular to the banks yesterday.
The reporting standard was adopted in the nation’s banking sector on January 1, 2012 as part of measures to improve reporting practices, transparency and disclosures in the sector. Nigeria’s adoption of the IFRS implies that all revisions to existing standards as well as new accounting standards issued by the International Accounting Standards Board (IASB) must be adopted by all reporting entities.
In July 2014, the IASB issued the final version of IFRS 9 (Financial Instruments) to replace IAS 39 (Financial Instruments: Recognition and Measurement) requiring all reporting entities that have adopted IFRS to implement the new accounting standard by January 1, 2018.
IFRS 9 prescribes new guidelines for the classification and measurement of financial assets and liabilities, making fundamental changes to the methodology for measuring impairment losses, by replacing the “incurred loss” methodology with a forward-looking “expected loss” model.