Regulatory Alerts2023-05-18
Regulatory Treatment of Accounting Provisions (D3/2023)
The Prudential Authority directs South African banks and auditors to classify IFRS 9 Expected Credit Loss provisions as either general or specific for regulatory capital purposes after the transition period. Stage 1 and Stage 2 exposures are treated as general provisions, whereas credit-impaired Stage 3 exposures are classified as specific provisions. These provisions are deducted from the exposure measure for leverage ratio calculations, replacing Directive 5/2017 and standardizing post-transition capital reporting.
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