Liabilities at fair value and impact of own Credit risk in results: IFRS 9

Abstract

Under the current accounting financial reporting standards (IAS 39), once the fair value option is elected for a liability, all changes of fair value are recognized in profit or loss. This accounting treatment has been criticized; since it supposes to recognize a gain arising from own credit spread deterioration. IFRS 9 modifies this treatment. Change in the fair value of the liability that is attributable to changes in own credit risk will be recognized in other comprehensive income.