CHALLENGES OF IMPLEMENTING IFRS 9 (FINANCIAL INSTRUMENTS) AND ITS IMPACT ON CREDIT RISK ASSESSMENT IN NIGERIAN BANKS

This study examines the challenges of implementing IFRS 9 (Financial Instruments) and its impact on credit risk assessment in Nigerian banks. IFRS 9 introduced a forward-looking Expected Credit Loss (ECL) model to replace the incurred loss model under IAS 39, thereby reshaping financial reporting and risk management practices. Using a descriptive and explanatory research design, data were collected from selected Nigerian deposit money banks through structured questionnaires and analyzed using descriptive and inferential statistics. The findings reveal that while IFRS 9 has enhanced credit risk recognition, transparency, and financial reporting quality, its implementation is constrained by technical challenges such as inadequate credit data, high compliance costs, and limited technical expertise among bank personnel. The study concludes that the full benefits of IFRS 9 can only be realized through improved data management systems, regulatory supervision, and staff training. It recommends that the Central Bank of Nigeria and the Financial Reporting Council strengthen monitoring mechanisms and promote the use of advanced credit risk analytics among Nigerian banks.