Catherine Murphy (Kildare North, Social Democrats)
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100. To ask the Minister for Finance if he will confirm that a loophole, known as the incurred loss model, which allows banks to hide losses by recognising loans at amounts above the amount the bank expects to recover will not be used in view of the fact that he plans to sell a portion of a bank (details supplied); if will ensure that this bank will reveal details of all losses in its forthcoming prospectus;; and if he will make a statement on the matter. [24984/17]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, I have no role in the day-to-day management or financial reporting of any bank in which the State is a shareholder. The financial reporting obligations, accounting practices and publication of financial results are matters solely for the Board and Management of each institution.

AIB produces detailed, externally audited accounts in line with international accounting best practice. Further, the provisioning models used by the bank, to account for specific or statistical risk of loss, are assessed and scrutinised by their regulator the Central Bank of Ireland.

I requested that AIB comment on the Deputy's question and they have provided the following response:

"AIB Financial Accounts are prepared in accordance with International Accounting Standards and International Financial Reporting Standards (collectively “IFRSs”).

Accordingly, IAS 39 Financial Instruments: Recognition and Measurement, is applicable and this policy ensures that provisions are made for impairment of financial assets to reflect the losses inherent in those assets at a reporting date (the incurred loss model). Where there is objective evidence that a financial asset is impaired (the discounted future cash flow from the financial asset is lower than its carrying value), a provision is raised."