The Application And Impact Analysis Of Financial Asset Impairment Model In China's Commercial Banks

In 2008,the outbreak of the financial crisis has brought the current financial asset impairment model——Incurred Loss Model into question for its defects,and the revision of financial instruments accounting standards have become urgent.In 2009,IASB and FASB jointly set up a financial crisis advisory group to work together on the reform of financial asset impairment standards,mainly for the pro-cyclicality of financial asset impairment and cliff effect of the deferred confirm.After repeated revisions,IASB launched the latest research result——Expected Credit Loss Model in July 2014 to replace the current Incurred Loss Model.In addition,it has been incorporated into IFRS 9 and implemented internationally on 1 January 2018.Based on the international convergence of accounting standards,China revised the "Accounting Standards for Business Enterprises No.22-the recognition and measurement of financial instruments" on March 31,2017,the implementation of Expected Credit Loss Model in China will be inevitable,which will also bring great impact to China' s commercial banks.Based on the above background,this paper adopts the method of normative research,simulation case and actual estimation to study the related problems of financial assets impairment in commercial banks.This paper consists of six parts.First of all,In the first and second part of this paper,research status at home and abroad of the impairment of financial assets and some theoretical basis are summarized,which leads to the research content,that is the impairment of financial assets in commercial banks,especially loans and advances.Secondly,this paper discusses and analyzes the current Incurred Loss Model and some relevant financial asset impairment models jointly reformed by IASB and FASB,focusing on the theoretical analysis and simulation applications of the idealized Expected Cash Flow Model and the latest Expected Credit Loss Model,and its advancements and limitations in the current financial environment are also evaluated.Finally,in the fifth part of this paper,I focus on the implementation of the Expected Cash Flow Model in China's commercial banks,and select financial report data of a state-owned bank,joint-stock commercial bank and city commercial bank as the sample to estimate and analysis the effects of commercial banks using the new model will be on the financial assets impairment,profitability and so on.On this basis,in the sixth part of this article,I put forward the relevant suggestions on the challenges and countermeasures of the implementation of the new model of China's commercial banks.