Pearse Doherty (Donegal, Sinn Fein)
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153. To ask the Minister for Finance his plans to act on reports that there is a ticking time bomb regarding the practice of banks concerning revenue recognition before earned income from interest free credit cards in view of reports that a number of lenders (details supplied) are offering these introductory 0% balances; and if he will make a statement on the matter. [21681/17]

Michael Noonan (Limerick City, Fine Gael)
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I understand that the accounting rules around income recognition are covered primarily under International Accounting Standard IAS 18 which requires that the following conditions are met before income can be recognised:

- it is probable that any future economic benefit associated with the item of revenue will flow to the entity, and

- the amount of revenue can be measured with reliability.

While it is the responsibility of the auditors of the banks to give an independent opinion that the banks’ accounts give a true and fair view of their assets, liabilities and financial position, supervisors are aware of the risk and continue to monitor the assumptions used by banks around income recognition on all their loan books. 

Through the Central Bank's supervision and inspection work, I am informed that they continually evaluate aspects of the business model of institutions to address areas of concern and where issues are identified, they require the relevant credit institutions to remediate these issues.

In terms of the specific issue around introductory rates for credit card transfers in the Irish market, I understand that the duration of these offers are typically in the range of 6/7 months. 

In addition, I understand that for those banks that offer such deals in the Irish market, the proportion of credit card accounts on such offers, is limited (<10% of total credit card accounts).