IFRS 9 and IFRS 7 Disclosure Requirements – An Analysis of the IASB Taxonomy

9 Pages Posted: 18 Nov 2016 Last revised: 2 May 2021

See all articles by Dirk Beerbaum

Dirk Beerbaum

Frankfurt School of Finance & Management; Aalto University - Department of Accounting and Finance; Aalto University - School of Business

Maciej Piechocki

Independent

Date Written: November 16, 2016

Abstract

Main topic: This study concentrates on those disclosure requirements, which are defined by the new IFRS 9 and IFRS 7 related IASB Taxonomy. IASB has introduced a new standard (IFRS 9) on impairment, which requires a three-step approach, which in general replaces the current incurred impairment model with a new expected loss model. This new standard requires additional complex disclosures. The study provides early insights into implementation of IFRS 9 disclosure requirements on impairment, as IFRS 9 will become applicable 2018.

There is a large debate ongoing about the interpretation of the implementation of the IFRS 9 and IFRS 7 disclosure requirements. However, the IFRS Taxonomy is not very much part of this debate, although several advantages relate to the IASB taxonomy: principle-based accounting standard does very often not define specifically disclosure rules for each and every topic, therefore to derive reporting elements would be very difficult to accomplish. A robust taxonomy development and governance process leading to the IFRS taxonomy simplifies the task of interpretations and the actual expression of reporting elements.

Results: The IFRS 9 and IFRS 7 corresponding IFRS Taxonomy is not easy to read, as it involves particularly a large multidimensional table for the impairment rollforward, which without the use of an XBRL taxonomy software is very difficult to understand. The provided illustrative IASB Taxonomy as a PDF can not sufficiently replace the transparency of an XBRL taxonomy software as it can not display multidimensional tables. This also due to the fact that the roll-forward is a matrix of columns and rows, which go over more than ten pages. Due to these very detailed and sophisticated requirements, however annual reports as they still have to printed out have “natural” limits with regard to size and maximum number of columns for multinational tables, the question will arise how larger banks cn cope up with these requirements.

Keywords: IFRS 9, IFRS 7, Taxonomy, Principles-Based, Rule-Based, IFRS, Standardsetter, Electronic Structured Reporting

Suggested Citation

Beerbaum Dr., Dirk and Piechocki, Maciej, IFRS 9 and IFRS 7 Disclosure Requirements – An Analysis of the IASB Taxonomy (November 16, 2016). Available at SSRN: https://ssrn.com/abstract=2870875 or http://dx.doi.org/10.2139/ssrn.2870875

Dirk Beerbaum Dr. (Contact Author)

Frankfurt School of Finance & Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

Aalto University - Department of Accounting and Finance ( email )

P.O. Box 1210
Helsinki, 00100
Finland

Aalto University - School of Business ( email )

Finland

Maciej Piechocki

Independent ( email )

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