ESMA issues guidance on accounting implications of COVID-19 specific to ECL

ESMA has issued a public statement on the audit implications of the COVID-19 outbreak on the calculation of expected credit losses (‘ECL’) under IFRS 9. The document includes ESMA’s views on a number of areas, including:

• Accounting for the modifications resulting from the introduction of support measures by governments;
• Assessment of whether a significant increase in credit risk has occurred;
• ECL estimation;
• Public guarantees on issuers’ exposures; and
• Disclosures.

The public statement may be accessed here.