The Effect of implementation of IFRS 9 on the financial performance of listed commercial banks in Kenya
Date
2020
Authors
Karanu, G. M.
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Publisher
Strathmore University
Abstract
The study seeks to explain the IFRS 9 standard and its effect on the financial performance of the listed commercial banks in Kenya. The financial performance, in this case, will be based on profitability and liquidity. The standard introduces a new Expected Credit Loss Model (ECL) that with supervisory guidelines that were implemented on the mandatory date of 151 January 2018. The model includes earlier and bigger impairment losses which minimize the losses incurred and more effective market discipline. However, the model creates additional space for managerial discretion through the volatility of the regulatory capital. This gives the executives a chance to behave in an opportunistic behaviour which can compromise the integrity of the financial disclosures (NovotnyFarkas,2016). This study used a sample size of 11 respondents. These compromised of the 11 listed commercial banks in Kenya. This study applied the correlational and descriptive analysis of the quantitative and qualitative data retrieved. The response rate totalled to 81% which is considered sufficient for data analysis. The data of the study were collected through questionnaires for the primary data and financial disclosures of the commercial banks. The data was analysed through Excel, Ann ova. The findings of the study revealed that the standard does has a little effect on the liquidity due to the recognition and recognition of the assets as well as profitability as the standard strives to minimize losses made. However, the effect is not substantial it can be seen.
Description
Full - text undergraduate research project
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Citation
Karanu, G. M. (2020). The Effect of implementation of IFRS 9 on the financial performance of listed commercial banks in Kenya [Strathmore University]. http://hdl.handle.net/11071/16083