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October 19, 2017

MAS published a feedback statement to the consultation proposing amendments to MAS Notices 612, 1005, 637, and 1111 in relation to the changes in the recognition and measurement of allowance for credit losses—introduced in International Financial Reporting Standard 9 (IFRS 9) and Singapore Financial Reporting Standard (SFRS) 109.. The consultation was published on May 12, 2017 and comments were due by June 12, 2017. The list of respondents and the feedback that respondents agreed to publish are appended to Annexes A and B, respectively.

This document summarizes comments that are of wider interest, along with MAS’ responses and policy decisions. MAS will reply to all respondents individually and publish the finalized MAS Notices 612, 1005, 637, and 1111 before the end of 2017. The policy proposals are calibrated to meet MAS’ prudential objectives in areas where the expected credit loss (ECL) model under IFRS 9 and SFRS 109 may not fully address its prudential concerns. MAS received a wide range of feedback from various stakeholders, with some respondents seeking clarification on certain policy proposals. MAS has carefully considered all feedback received, taking into account its observations on the ECL accounting model and its prudential objectives, along with the requirement for banks in Singapore to apply SFRS 109.

The Singapore Accounting Standards Council has adopted the IFRS 9 standard and issued it as SFRS 109 Financial Instruments. SFRS 109 will replace SFRS 39 Financial Instruments: Recognition and Measurement and will be effective for annual periods beginning on or after January 01, 2018. Banks in Singapore are, therefore, required to apply SFRS 109, or IFRS 9 (for locally incorporated banks that are listed on the Singapore Exchange), in the preparation of their financial statements for reporting periods beginning on or after January 01, 2018, in accordance with sections 201 or 373 of the Companies Act (Cap. 50). SFRS 109 introduces a new approach for the estimation of allowance for credit losses based on the expected credit loss (ECL) model, which includes more forward-looking information and addresses the issue of delayed recognition of credit losses on loans and other financial instruments under the incurred loss model.


Effective Date: January 01, 2018

Keywords: Asia Pacific, Singapore, Banking, Accounting, IFRS 9, ECL, SFRS 109, Credit Loss Provisioning, MAS

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