Discussion Paper and comment letters—Credit Risk in Liability Measurement


On 18 June 2009 the International Accounting Standards Board (IASB) published for public comment a discussion paper on the role of credit risk in liability measurement. The paper is accompanied by a staff paper that describes the most common arguments for and against including credit risk in measuring liabilities.

Credit risk in liability measurement is often referred to as ‘own credit risk’. Existing International Financial Reporting Standards (IFRSs) require profit or loss resulting from changes in ‘own credit’ to be booked when debt is fair valued. From an accounting perspective there are good reasons for applying fair value measurement to both assets and liabilities. However, some see the outcome as counter-intuitive. Recent developments in the financial markets have led to increased concerns about gains that result from changes in the value of an entity’s liabilities.

The discussion paper responds to this concern. The issue of ‘own credit risk’ has relevance to other IASB projects, in particular in the accounting for financial instruments, insurance, fair value measurement and provisions, contingent liabilities and contingent assets.

The Discussion Paper was open for comment until 1 September 2009.


Comment letters are public and all comment letters received on the due process document can be accessed below.

If you have trouble finding a specific comment letter, please contact us.

Access individual comment letters in the table below or download all letters as zip file.

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