Abstract:
Adopting the International Financial Reporting Standard (IFRS) 9 has introduced significant
changes in financial reporting, emphasizing a forward-looking Expected Credit Loss (ECL) model
over the traditional incurred loss model. Although this change agenda intends to improve standards
and mitigate cross-border risks, the adoption experience is complex in emerging markets such as
Pakistan. This paper aims to identify challenges faced by conventional banks in Pakistan while
adopting IFRS 9 analysis from technical, operational, and regulatory perspectives. The research
methodology used in the case is a quantitative survey whereby data was obtained from 49 banking
sector participants, including financial managers, accountants, and risk management professionals.
This study’s implications indicate that while IFRS 9 has long-term potential to enhance risk
management and financial stability, the implementation process has its challenges necessitating a
progressive process that can only be backed up by capacity enhancement, technological
implementation, and regulatory convergence. They suggested and proposed measures to improve
the level of preparedness such as increased engagement with key players in the counfry; training
activities; and policy changes and development therefore, the study provides blueprints that can
ease the implementation of IFRS 9 into the banking system of Pakistan. This study fills the research
gap of IFRS 9 implementation in developing economies and provides implementational
implications for similar environments.
