A Comparison Study between IFRS 9 and IAS 39 in GCC Countries


  •   Rania Al-Nsour

  •   Murad Abuaddous


IFRS 9 was introduced as a replacement for IAS 39, which spurred a wide debate since its implementation. This study aims to show the impact of IFRS 9 on the performance, solvency, credit ratio, capital adequacy ratio, expected credit loss, non-performing credits and write-offs for local banks operating within the Gulf Cooperation Council. To achieve the objectives of this study, data from financial disclosures was collected for 53 GCC banks for the period 2012-2020, which had 477 years of observation. The cross-sectional data was analyzed using the logit model (panel logistic regression model), capable of extracting non-linear relationships. This study found that there was a substantial positive difference in the percentage of the provision for credit losses, write-offs, and credit and non-performing credit ratios after the implementation of the IFRS 9. In contrast, no substantial difference was found in financial performance indicators, solvency, and capital adequacy ratio. The study offered a set of recommendations based on these findings and offered a number of potential future research opportunities to enrich the topic.

Keywords: Bank Performance, Financial Indicators, GCC Banks, IFRS 9, IAS 39, Logit Model.


Abd Allah, A. (2009). The effect of diverse accounting practices of financial instruments under IFRS on de facto harmonization and comparability: An empirical study of IAS 39 in Sweden.

ABUADDOUS, M. Y. (2022). The Implementation of IFRS 9 in Gulf Banks: A Comprehensive Analysis. The Journal of Asian Finance, Economics and Business, 9(8), 145–155. https://doi.org/10.13106/JAFEB.2022.VOL9.NO8.0145.

Albanna, A. A. (2019). The new accounting standard IFRS 9 and its impact on how banks should provision for credit losses [Doctoral Dissertation]. British University in Dubai.

Barth, M. E., & Landsman, W. R. (2010). How did financial reporting contribute to the financial crisis? European accounting review, 19(3), 399-423.

Bellagdid, A., Sahibeddine, A., Britel, I., & Godowski, C. (2021). The Transition from IAS 39 to IFRS 9 and Its Impact on Financial Performance: Case of a Moroccan Public Financial Institution. FEMIB, pp. 89-97.

Besmir, Ã., AHMETI, S., & Muhamet, A. L. I. U. (2021). Ifrs 9 transition effect on financial stability of kosovo commercial banks. Prizren Social Science Journal, 5(1), 1-10.

Bolt, W., De Haan, L., Hoeberichts, M., Van Oordt, M. R., & Swank, J. (2012). Bank profitability during recessions. Journal of Banking & Finance, 36(9), 2552-2564.

Buesa, A., Población García, F. J., & Tarancón, J. (2020). Measuring the procyclicality of impairment accounting regimes: a comparison between IFRS 9 and US GAAP.

Ertan, A. (2021). Expected losses, unexpected costs? Evidence from SME credit access under IFRS 9. Evidence from SME Credit Access under IFRS, 9

Escaffre, L., & Ramond, O. J. (2007, September). Toward an understanding of the IAS 39 derecognition principles: An application to the factoring transactions' reporting. In EUFIN Workshop on Accounting in Europe.

Farooq, M. O., Elseoud, M., Turen, S., & Abdulla, M. (2019). Causes of non-performing loans: the experience of gulf cooperation council countries. Entrepreneurship and Sustainability Issues, 6(4), 1955-1974.

Gebhardt, G. (2016). Impairments of Greek government bonds under IAS 39 and IFRS 9: A case study. Accounting in Europe, 13(2), 169-196.

Gebhardt, G., & Novotny-Farkas, Z. (2018). Comparability and predictive ability of loan loss allowances–The role of accounting regulation versus bank supervision.

Gornjak, M. (2017). Comparison of IAS 39 and IFRS 9: The analysis of replacement. International Journal of Management, Knowledge and Learning, (1), 115-130.

Hashim, N., Li, W., & O'Hanlon, J. (2019). Reflections on the development of the FASB’s and IASB’s expected-loss methods of accounting for credit losses. Accounting and business research, 49(6), 682-725.

Ibrahimi, A. (2019). Loan loss provisioning and market discipline: Evidence from the IFRS 9 adoption Available at SSRN 3488058. (2019). https://doi.org/10.2139/ssrn.3488058

Kund, A. G., & Rugilo, D. (2019). Assessing the implications of IFRS 9 on financial stability using bank stress tests. Working paper: University of Cologne.

Kusano, M., & Sanada, M. (2019). Crisis and organizational change: IASB’s response to the financial crisis. Journal of Accounting & Organizational Change.

Mora, A. (2022). Discussion of ‘Moving toward the expected credit loss model under IFRS 9: Capital Transitional Arrangement and bank systematic risk'. Accounting and Business Research, 1-10.

Morais, A. I. (2020). Are changes in international accounting standards making them more complex? Accounting Forum, Routledge, 44(1).

Mullinova, S. (2016). Use of the principles of IFRS (IAS) 39" Financial instruments: recognition and assessment" for bank financial accounting. Modern European Researches, (1), 60-64.

Ntaikou, I., Vousinas, G., & Kenourgios, D. (2021). The Expected Impact of IFRS 9 on the Greek Banking System’s Financial Performance: Theoretical Considerations and Insights. Dr. Despoina and Vousinas, Georgios and Kenourgios, Dimitris, The Expected Impact of IFRS, 9.

Omar, A.-S. R., & Rana. (2020). The impact of the application of the International Financial Reporting Standard (IFRS 9) on improving the financial performance of Egyptian commercial banks. Journal of Financial and Commercial Research, 21(Fourth Issue - Part One), 134-165

Omukhulu, B. A. (2020). Impact Of International Financial Reporting Standard 9 (Ifrs 9) Implementation on Financial Performance of Commercial Banks in Kenya (Doctoral dissertation, Kca University).

Pucci, R., & Skærbæk, P. (2020). The co-performation of financial economics in accounting standard-setting: A study of the translation of the expected credit loss model in IFRS 9. Accounting, Organizations and Society, 81, 101076.

Qadiri, H., & Alsughayer, S. Credit Risk and Disclosure Behavior in the Bank Industry: Evidence from Saudi Arabia.

Ramirez, J. (2015). Accounting for derivatives: advanced hedging under IFRS 9. John Wiley & Sons

Rudžionienė, K., Černiauskaitė, M., & Klimaitienė, R. (2022). The impact of IFRS adoption on companies' financial ratios: evidence from Lithuania. Entrepreneurship and sustainability issues, 9(3), 212-226.

SALAMI, A. A., UTHMAN, A. B., IBRAHIM, R. O., & NAGERI, K. I. (2022). Bank Funding Strategy and Income Smoothing Practices in Nigeria: IFRS and Solvency Risk Analysis. Global Journal of Accounting, 8(1), 13-30.

Ślązak, E., & Skwarzec, M. The effects of IFRS 9 valuation model on cost of risk in commercial banks–the impact of COVID-19.

Sunder, S. (2009). IFRS and the accounting consensus. Accounting horizons, 23(1), 101-111.

Taylor, D., & Aubert, F. (2022). IFRS-9 adoption and income smoothing nexus: A comparison of the post-adoption effects between European and Sub-Saharan African Banks. Journal of Accounting and Taxation.

Vazquez, F., & Federico, P. (2015). Bank funding structures and risk: Evidence from the global financial crisis. Journal of banking & finance, 61, 1-14.

Walton, P. (2004). IAS 39: Where different accounting models collide. Accounting in Europe, 1(1), 5-16.

World Bank. (2021). Seizing the opportunity for a sustainable recovery. https://openknowledge.worldbank.org/handle/10986/36654.


Download data is not yet available.


How to Cite
Al-Nsour, R., & Abuaddous, M. (2022). A Comparison Study between IFRS 9 and IAS 39 in GCC Countries. European Journal of Business and Management Research, 7(6), 7–13. https://doi.org/10.24018/ejbmr.2022.7.6.1687