Steven Lauricella explains the five things CFOs and Treasurers need to know about the new regulations, and how alternative solutions can be harnessed to fund crucial supply chain initiatives.
The supply chain finance industry has been faced with a choice: increase disclosure or continue to face criticism.
Since 2000, global trade flows have trebled to US$18.5 trillion. Yet many challenges to the adoption of trade finance products remain.
Following the financial crisis, the International Accounting Standards Board (IASB) recognised the need for a forward-looking approach to account for credit losses. Previously, the IAS 39 accounting standard for assessing provisions was based on an incurred loss model. This approach has been criticised as “too little, too late” as it was perceived as delaying the recognition of potential turbulences while favouring forbearance.