The Impact of Credit Risk Level in the Financial Statements of Banks According to the Application of the International Financial Reporting Standard (IFRS) No. (9)

An applied study of a sample of Iraqi private banks for the period from 2014 to 2023

Abstract

The application of International Financial Reporting Standard (IFRS) No. (9) represents the best modern accounting treatment of financial assets and liabilities, impairment procedures, hedging, and fair value accounting, which largely replaces the International Accounting Standard (IAS) No. (39). It has been implemented in all Iraqi commercial banks since January 1st, 2019, encouraging early implementation. The key characteristics that distinguish this standard are fair value computation, financial instrument registration and classification, and hedge accounting. Impact of Credit Risk Level under the Application of International Financial Reporting Standard (IFRS) No. (9) commercial banks in Iraq for the period of 2014 to 2023, and their number (10) banks, has been selected a sample of these banks to be the financial statements and notes complementary to banks complete and issued annually and apply the standard of IFRS No. (9) under the instructions of the Central Bank of Iraq and thus became the research sample (10) bank after excluding banks not listed in the Iraq Stock Exchange. The results show that when applying the International Financial Reporting Standard (IFRS) No. (9), the correct classification percentage of the proposed model (72%), this is while not applying the International Financial Reporting Standard (IFRS) No. (9), the percentage the correct classification percentage of the proposed model (68%). Therefore, this result should be an incentive to implement the International Financial Reporting Standard (IFRS) No. (9) in the banking sector listed on the Iraqi Stock Exchange.