NECESSITY OF RISK ESTIMATION, CLASSIFICATION OF LOANS IN BUCKET AND ADJUSTING THEM
Financial assets that are mainly represented by loans or similar investments are produced and controlled by credit institutions. These, together with the services, can contribute to a sustainable economic development, sometimes under conditions of risk and uncertainty. Among the financial assets e...
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Format: | Article |
Language: | English |
Published: |
Academica Brâncuşi
2019-12-01
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Series: | Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie |
Subjects: | |
Online Access: | http://www.utgjiu.ro/revista/ec/pdf/2019-06/09_Medar.pdf |
Summary: | Financial assets that are mainly represented by loans or similar investments are produced and controlled
by credit institutions. These, together with the services, can contribute to a sustainable economic development,
sometimes under conditions of risk and uncertainty. Among the financial assets existing on the market, credit can be
a strategic pillar for the development of Romania's economy in a healthy economic environment. However, in an
economic environment perceived as having a high risk determined by different internal factors, the financial
intermediation offered by the credit institutions can be negatively influenced.
The size of the bad loans and the estimation of the risks for adjusting the loans according to their
categories, determines the credit institutions to find the best models of risk assessment.
IFRS 9 introduces a new approach regarding the classification of financial assets, determined by the
business conditions of the credit institutions, that is how a bank manages, under financial risk conditions, to
generate the cash flows. In this paradigm, the contractual cash flows from the banking business representing
exclusively payments of the principal and of the interest related to the value of the principal due, eliminates the
categories of classification of the financial assets stipulated in IAS 39. and their proper adjustment. The research
methods used in this study are: observation, grouping and comparison. |
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ISSN: | 1844-7007 1844-7007 |