Regulatory Alerts2017-03-22
Circular CN-BSD/2017/8: Loan Loss Provisioning: International Accounting Standards vs MMA Standards
The Maldives Monetary Authority issued this circular to resolve discrepancies between international accounting standards and local MMA regulations regarding loan loss provisions. Banks are required to apply the more conservative provision amount, and if MMA standards dictate higher provisions, the difference must be allocated to a non-distributable capital reserve with enhanced disclosure. This approach ensures compliance with both regulatory frameworks while maintaining the integrity of financial statements for users.
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