What is it about?

IFRS 9 was introduced in 2014 with a mandatory application in 2018. Major concerns on a political level raised that long-term investment strategies appear less favourable. We show that concerns about banks' decreasing maturity investment behaviour and increased profit or loss volatility since the publication of IFRS 9 in 2014 cannot be verified. Additionally, banks hardly use the FVO in practice. Finally, the paper finds that the FVOCI option for equity instruments has almost no importance for banks.

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Why is it important?

Our paper provides empirical substance to a political debate. Concerns that IFRS 9 would influence long-term investments cannot be verified. Therefore, the standard reflects the actual business activities of banks rather than influencing them. To reduce the complexity of the rules themselves or in analysing the results the IASB could abolish two measurement categories, namely the Fair Value Option and the accounting choice in favour of Fair Value through Equity for equity instruments. The remaining three categories would be easier to understand.


Since the introduction of financial instruments accounting rules, there was a debate which is only partly based on serious arguments but often misused to achieve political aims. More empirical evidence is needed to have a solid foundation for further developments.

Prof. Dr. Edgar Loew

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This page is a summary of: Long and Short‐term Investments by European Banks – Trends Since the IASB Published IFRS 9, Australian Accounting Review, November 2022, Wiley, DOI: 10.1111/auar.12390.
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