BAKU, Azerbaijan, February 25. The Board of the Central Bank of Azerbaijan (CBA) approved the "Methodological guidance on the application of IFRS 9 in the classification of assets and the provisioning" on December 23, 2025, to align the classification of assets and the provisioning in banks with the 9th International Financial Reporting Standard (IFRS 9), Trend reports via the CBA.
The adoption of the guidance, which has been approved for the implementation of the "Strategy for the Development of the Financial Sector 2024-2026," marks a pivotal step in the integration of IFRS standards into prudential regulation and reporting frameworks. This initiative is crucial for aligning prudential regulation with leading international practices, thereby enhancing both accountability and transparency within the banking sector. Furthermore, it fosters greater comparability between banks on a global scale.
The guidance outlines the classification of bank assets in accordance with IFRS 9 for the purposes of prudential supervision. Additionally, it introduces a harmonized approach to provisioning practices. Starting in 2026, asset classification and provisioning within banks will be conducted concurrently under both IFRS 9 and the existing prudential requirements, ensuring a dual framework of compliance.
In order to provide banks with the necessary methodological support and clarify questions of interest to banks regarding the application of the guidance, the CBA held meetings with bank specialists who will be responsible for preparing IFRS 9 reports, and detailed discussions of practical issues were held.
The guidance document can be found at the link:
https://uploads.cbar.az/assets/93968292987fc27975a90fcfd.pdf