Expected Credit Loss Analysis for PSAK 109: Evidence from Banks in Indonesia

Lindrawati Lindrawati, Kesya Agnes Maria

Abstract


The aim of this study is to analyze the difference of expected credit loss (ECL) value before and after PSAK 109 implementation. The event study method and a paired sample t-test to analyze this study. Data is obtained from bank financial statements listed on Indonesia Stock Exchange. The finding show ECL before and after PSAK 109 implementation is difference, where there was an increase. The increase was due to higher potential for default in times of economic crisis and lies in too much on management judgment. This study support agency theory and has implications for accounting policies standard that could make it easier to determine ECL, also for management to be prudence in disbursing loans. The novelty is research of ECL relatively new and examines entire ECL of bank financial assets and not just credit accounts, so it is hoped can provide a comprehensive impact of PSAK 109 implementation.



Keywords


Banking, Expected Credit Loss, PSAK 109

Full Text:

PDF

References


Abad, J., & Suarez, J. (2017). Assessing The Cyclical Implications of IFRS 9 - A Recursive Model. ESRB Occasional Paper Series. https://www.esrb.europa.eu/pub/pdf/occasional/20170717_occasional_paper_12.en.pdf

Alam, S. M. S., Chowdhury, M. A. M., & Razak, D. B. A. (2021). Research Evolution in Banking Performance: a Bibliometric Analysis. Future Business Journal, 7(1), 1–19. https://doi.org/10.1186/s43093-021-00111-7

Anindya, O. S., Lindrawati, L., & Rahayu, M. (2024). Analysis of Stock Returns in Financial Restatements. Jurnal Manajemen, Teknologi Informatika Dan Komunikasi (Mantik), 7(4), 3597–3606. https://doi.org/10.35335/mantik.v7i4.4738

Aviliani, A., Siregar, H., Maulana, T. N. A., & Hasanah, H. (2015). The Impact of Macroeconomic Condition on The Banks Performance in Indonesia. Bulletin of Monetary Economics and Banking, 17(4), 379–402. https://doi.org/10.21098/bemp.v17i4.503

Awuye, I. S., & Taylor, D. (2024). Over Half a Decade into the Adoption of IFRS 9: a Systematic Literature Review. Journal of Accounting Literature. https://doi.org/10.1108/JAL-11-2023-0204

Bank for International Settlements. (2017). IFRS 9 and Expected Loss Provisioning - Executive Summary. December. https://www.bis.org/fsi/fsisummaries/ifrs9.htm

Barth, M. E. (2013). Global Comparability in Financial Reporting: What, Why, How, and When? China Journal of Accounting Studies, 1(1), 2–12. https://doi.org/10.1080/21697221.2013.781765

Bholat, D., Lastra, R. M., Markose, S., Miglionico, A., & Sen, K. (2018). Non-performing Loans at The Dawn of IFRS 9: Regulatory and Accounting Treatment of Asset Quality. Journal of Banking Regulation, 19(1), 33–54. https://doi.org/10.1057/s41261-017-0058-8

Chartered Financial Analyst Institute. (2022). Financial Reporting Standards. https://www.cfainstitute.org/en/membership/professional-development/refresher-readings/financial-reporting-standards

Chen, Y., Yang, C., & Zhang, C. (2020). Study on The Influence of IFRS 9 on The Impairment of Commercial Bank Credit Card. Applied Economics Letters, 29(1), 35–40. https://doi.org/10.1080/13504851.2020.1855298

Cleartax. (2022a). Retail Banking. September. https://cleartax.in/g/terms/retail-banking

Cleartax. (2022b). Wholesale Banking. September. https://cleartax.in/g/terms/wholesale-banking

Devi, S., Wigarba, I. G. A., Herawati, N. T., & Yasa, I. N. P. (2021). A Comparison Between PSAK 71 and PSAK 55 in The Banking Industry. Jurnal Ekonomi Dan Bisnis, 24(1), 173–188. https://doi.org/10.24914/jeb.v24i1.4382

Engelmann, B. (2021). Calculating Lifetime Expected Loss for IFRS 9: which formula is measuring what? The Journal of Risk Finance, 22(3/4), 193–208. https://doi.org/10.1108/JRF-05-2020-0113

Ernst and Young. (2018). IFRS 9 Financial Instruments Impairment Survey – Challenges Remain. July. https://www.ey.com/en_gl/ifrs-technical-resources/ifrs-9-financial-instruments-impairment-survey-challenges-remain

Financial Accounting Standards Board. (2010). Comparability in International Accounting Standards. https://www.fasb.org/info/international#section-3

Franco, G. de, Kothari, S. P., & Verdi, R. S. (2011). The Benefits of Financial Statement Comparability. Journal of Accounting Research, 49(4), 895–931. https://doi.org/10.1111/j.1475-679X.2011.00415.x

G20. (2022). About The G20. https://g20.org/about-the-g20/

Gómez-Ortega, A., Gelashvili, V., Jalón, M. L. D., & Menéndez, J. Á. R. (2022). Impact of the Application of IFRS 9 on listed Spanish credit institutions: implications from the regulatory, supervisory and auditing point of view. The Journal of Risk Finance, 23(4), 437–455. https://doi.org/10.1108/JRF-01-2022-0023

Gubareva, M. (2021). How to estimate expected credit losses – ECL – for provisioning under IFRS 9. The Journal of Risk Finance, 22(2), 169–190. https://doi.org/10.1108/JRF-05-2020-0094

Guo, S. (Yuanyuan), Mei, B., Rao, Y., & Ye, J. (2023). Challenges and economic consequences of IFRS 9: evidence from China. Journal of Accounting Literature, 47(2), 298–324. https://doi.org/10.1108/JAL-06-2023-0109

IDX Channel. (2021). Kredit Macet Gara-gara Pandemi, Pengusaha UMKM Bisa Lapor ke Sini. September. https://www.idxchannel.com/economics/kredit-macet-gara-gara-pandemi-pengusaha-umkm-bisa-lapor-ke-sini

Ikatan Akuntan Indonesia. (2014). Pernyataan Standar Akuntansi Keuangan 55. Dewan Standar Akuntansi Keuangan Ikatan Akuntan Indonesia.

Ikatan Akuntan Indonesia. (2018). Pernyataan Standar Akuntansi Keuangan 71. Dewan Standar Akuntansi Keuangan Ikatan Akuntan Indonesia.

Ikatan Akuntan Indonesia. (2024). Standar Akuntansi Keuangan. Ikatan Akuntan Indonesia.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: managerial behavior, agency cost, and ownership structure. Journal Of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X

Kompas TV. (2021). Kredit Macet Naik Akibat Pandemi, Ini Solusi yang Ditawarkan Bankir ke Jokowi. September. https://www.kompas.tv/article/209785/kredit-macet-naik-akibat-pandemi-ini-solusi-yang-ditawarkan-bankir-ke-jokowi

Kontan.co.id. (2019). Banyak Bank Belum Siap, Penerapan PSAK 71 Berpotensi Direlaksasi. Maret. https://keuangan.kontan.co.id/news/banyak-bank-belum-siap-penerapan-psak-71-berpotensi-direlaksasi

Kuncoro, A. (2020). Kontra Siklus Perbankan Melawan Virus Korona. Maret. http://uiupdate.ui.ac.id/article/ari-kuncoro-kontra-siklus-perbankan-melawan-virus-korona

Kustina, K. T., & Putra, I. G. P. N. A. (2021). Implementasi PSAK 71 Januari 2020 dan Profitabilitas Perbankan di Indonesia. Jurnal Ilmiah Akuntansi Dan Bisnis, 6(1), 44–52. https://doi.org/10.38043/jiab.v6i1.2978

Magdalena, F. C. S., & Martani, D. (2019). The Effect of IFRS 9 Adoption on Loan Loss Provisions. International Conference on Rural Development and Entrepreneurship 2019: Enhancing Small Business and Rural Development Toward Industrial Revolution 4.0, 5(1), 1161–1168. https://scispace.com/pdf/the-effect-of-ifrs-9-adoption-on-loan-loss-provisions-57je7bkj18.pdf

Ningrum, N. R. W., Kirana, D. J., & Miftah, M. (2021). Pengaruh pengungkapan sustainability report, asimetri informasi, dan kinerja keuangan terhadap nilai perusahaan. Jurnal Penelitian Akuntansi, 2(1), 42–57. https://ojs.uph.edu/index.php/JPA/article/view/3588

Orban, I., & Tamimi, O. (2020). Accounting Model for Impairment under IFRS 9 and its Impact on Loss Allowance. European Research Studies Journal, 23(4), 1259–1277. https://www.um.edu.mt/library/oar/handle/123456789/76111

Otoritas Jasa Keuangan. (2022). Pedoman Akuntansi Perbankan Indonesia (PAPI). https://www.ojk.go.id/id/kanal/perbankan/Pages/Pedoman-Akuntansi-Perbankan-Indonesia-(PAPI).aspx

Ozili, P. K. (2022). Economic Policy Uncertainty, Bank Nonperforming Loans and Loan Loss Provisions: are they correlated? Asian Journal of Economics and Banking, 6(2), 221–235. https://doi.org/10.1108/AJEB-10-2021-0119

Parnes, D. (2021). A Spline Hazard Model for Current Expected Credit Losses. Journal of Financial Economic Policy, 14(3), 283–316. https://doi.org/10.1108/JFEP-08-2020-0175

Podder, J., & Mamun, A. Al. (2004). Loan Loss Provisioning System in Bangladesh Banking: A Critical Analysis. Managerial Auditing Journa, 19(6), 729–740. https://doi.org/10.1108/02686900410543859

Pramono, S. E., Rossieta, H., & Soedarmono, W. (2019). Income Smoothing Behavior and The Procyclical Effect of Loan Loss Provisions in Islamic Banks: Global Evidence. Journal of Islamic Accounting and Business Research, 10(1), 21–34. https://doi.org/10.1108/JIABR-09-2014-0032

PricewaterhouseCoopers (PwC). (2014). IFRS 9: Expected Credit Losses. Agustus. https://www.pwc.com/gx/en/audit-services/ifrs/publications/ifrs-9/ifrs-in-depth-expected-credit-losses.pdf

PricewaterhouseCoopers (PwC). (2017). IFRS 9, Financial Instruments—Understanding the Basics. https://www.pwc.com/gx/en/audit-services/ifrs/publications/ifrs-9/ifrs-9-understanding-the-basics.pdf

Receeve. (2022). How Digitisation Helps You Tackle IFRS 9 Challenges. https://www.receeve.com/blog/digitisation-and-ifrs-9

S&P Global Finance Intelligence. (2017). Credit Analysis IFRS 9 Implementation Top Five Concerns. October. https://www.spglobal.com/marketintelligence/en/news-insights/blog/ifrs-9-implementation-top-five-concerns

Santander. (2022). The Digital Economy: What It Is and Why It’s The Future of Business. June. https://www.santander.com/en/stories/digital-economy

Securities and Exchange Commission. (2000). SEC Concept Release: International Accounting Standards. February. http://www.sec.gov/rules/concept/34-42430.htm

Sibarani, B. B., & Asak, P. R. A. (2022). Analisis Likuiditas PT Bank IBK Indonesia TBK Sebelum dan Sesudah Penerapan PSAK 71. Jurnal Bisnis Dan Akuntansi Unsurya, 7(1), 62–72. https://doi.org/10.35968/jbau.v7i1.973

Sugiarto, S., & Suroso, S. (2020). Innovation of Impairment Loss Allowance Model of Indonesian financial Accounting Standards 71. Journal of Asian Business and Economic Studies, 27(3), 267–283. https://doi.org/10.1108/JABES-11-2019-0114

Suroso, S. (2017). Penerapan PSAK 71 dan Dampaknya terhadap Kewajiban Penyediaan Modal Minimum Bank. Jurnal Bina Akuntansi, 4(2), 157–165. https://doi.org/10.52859/jba.v4i2.31




DOI: https://doi.org/10.17509/jrak.v13i3.90033

Refbacks

  • There are currently no refbacks.


Creative Commons License

Jurnal Riset Akuntansi dan Keuangan  is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

View My Stats