EXPECTED CREDIT LOSSES MODEL AS AN INSTRUMENT OF RISK MANAGEMENT FOR NON-BANKING FINANCIAL INSTITUTIONS

Abstract

The article analyzes the use of IFRS 9 for credit risk management of non-credit financial institutions. In 2018, the new standard was applied for the first time in Russia, however, major market players – insurance companies and non-state pension funds – will only make the transition in 2022. This allows us to conclude that the study of this sphere is highly relevant. The hypothesis of the study is that the model for expected credit losses calculation can be used as a risk management tool for non-banking financial institutions. The study systematizes information from various legal acts and analyzes the impact of IFRS 9 on the financial statements of banks that have already begun to apply this model. Owing to the results of the study, it has been concluded that IFRS 9 allows organizations not only to adequately disclose information about financial instruments, but also to integrate risk management into the organization’s accounting. Existing examples of the transition to the new standard of credit organizations and small representatives of non-credit financial organizations show the importance of the adequate application of the expected credit loss model, but do not allow us to entirely use their created internal documents due to the specifics of insurance companies and nonstate pension funds.