An Empirical Study of the Development of Hedge Accounting in European Banks under IAS 39 and IFRS 9 Standards since 2018

Master's Thesis from the year 2023 in the subject Business economics - Investment and Finance, grade: 2, Frankfurt School of Finance & Management, course: Finance, language: English, abstract: The introduction of IFRS 9 has brought significant changes to hedge accounting practices in European banks, addressing limitations in the former IAS 39 standard. With three phases—classification, impairment, and hedging—IFRS 9 aims to better align financial reporting with risk management practices, particularly in hedge accounting. Despite the option to continue using IAS 39 for hedging, many banks have adopted IFRS 9 since its implementation in 2018. This study explores the development of hedge accounting since this transition, analyzing factors such as capital ratios and regional influences, and comparing the advantages of IFRS 9 to IAS 39. Through empirical analysis, it aims to assess the impact of the new standard on risk management and financial reporting in European banks.