Thailand's adoption of the International Financial Reporting Standard 9 (IFRS 9) does not have to follow the strict standard being implemented in developed countries, especially if there are adverse effects on small businesses and retail customers, says Finance Minister Apisak Tantivorawong.
"If there is no problem in adopting the new accounting standard, then things can proceed accordingly. But if problems arise, there should be studies about whether the impact would be on a large scale or not and solutions to alleviate the impact have to be implemented," Mr Apisak said. "IFRS 9 does not compel [Thai businesses] to adopt such standards, because it is only a framework for market-to-market [mechanisms] and beefing up capital requirements to mitigate financial risks.
"If we cannot adopt this framework, then we can roll out our own accounting standard in alignment with the IFRS 9."
Mr Apisak said he has personally asked related parties whether a strict adoption of the IFRS 9 is necessary or not, and the answer has been no, because IFRS 9 is merely an ideal framework.
Business operators recently asked the Federation of Accounting Professions (FAP) to postpone the effective deadline to submit statements in accordance with IFRS 9 to early 2022, saying industries across the economy have yet to conduct studies of the measure's impact.
The International Accounting Standards Board introduced IFRS 9 in response to the 2008 global financial crisis.
The mandatory effective date for implementation is Jan 1, 2018.
In Thailand, the FAP expects to implement its IFRS rules, commonly referred to as Thai Financial Reporting Standard 9, starting on Jan 1, 2019. Thailand uses International Accounting Standard 39.
Some 30-40% of small and medium-sized enterprises (SMEs) are customers at Thai banks, a figure higher than the 10% in developed countries, and higher banking provisions could force banks to charge higher interest rates than SMEs or refrain from offering loans, Mr Apisak said.
Financial regulators have to discuss IFRS 9 adoption with the FAP, as the group is responsible for enacting the framework, he said.
Somboon Chitphentom, assistant governor for the financial institutions policy group at the Bank of Thailand, said the central bank has held talks with financial institutions since 2016 for preparations in banking systems and capital reserve increases to meet IFRS 9.
Domestic financial institutions are ready to adopt the framework, but SMEs could be affected by a stricter accounting standard, for which the Commerce Ministry's Business Development Department is looking into the issue, Mr Somboon said.
