Regulatory Alerts2018-01-01
Instructions No. 03 of 2018 Regarding the Requirements and Guidelines for Implementing International Financial Reporting Standard No. 9
The Palestine Monetary Authority issued Instructions No. 03 of 2018 to mandate the implementation of International Financial Reporting Standard (IFRS) 9 for all specialized lending institutions, replacing the incurred loss model with a forward-looking Expected Credit Losses (ECL) framework. The directive establishes a three-stage impairment model requiring 12-month ECL recognition for Stage 1, lifetime ECL for Stages 2 and 3, and specifies distinct interest revenue calculation methods based on credit risk deterioration and asset classification. To facilitate compliance, the Authority permits reasonable approximations for ECL allowances during the first three quarters of 2018 while requiring full implementation by year-end, alongside enhanced qualitative and quantitative disclosure requirements and coordinated supervisory reviews with external auditors.