Regulatory Alerts2019-08-27
Instruction No. 13/2019 of 28 August
The National Bank of Angola issued Instruction No. 13/2019 to mandate Banking Financial Institutions under its supervision to apply the effective interest rate method for recognizing interest income and expenses on financial instruments in compliance with IFRS 9. The directive establishes precise definitions, calculation formulas, and application rules for both standard and credit-impaired financial assets and liabilities, while specifying which fees, transaction costs, and premiums are eligible or ineligible for inclusion in the effective interest rate calculation. It further dictates the accounting treatment for modifications, revisions of cash flow estimates, and the recognition periods for deferred costs, ensuring consistent measurement and impairment tracking across the Angolan banking sector.