Regulatory Alerts2020-06-16
Circular 3/2020 of the Bank of Spain modifying Circular 4/2017 on public and reserved financial information standards and financial statement models
The Bank of Spain issued Circular 3/2020 to modify Circular 4/2017, allowing credit institutions to classify restructured or refinanced loans as normal risk rather than special watchlist risk if they can rebut the presumption of a significant increase in credit risk. This regulatory adjustment aligns Spanish accounting practices with EBA guidelines and IFRS 9, providing flexibility to support businesses and households affected by the COVID-19 pandemic. The modification applies prospectively from June 30, 2020, or optionally from March 31, 2020, without requiring restatement of prior financial periods.
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