Capital Adequacy Raio

Banks have a maximum of four years, ending 2025, to restore the minimum paid-up capital. This is as a result of capital shortfall arising solely from the derecognition losses. According to the Bank of Ghana, derecognition losses emanating from the Domestic Debt Exchange Programme will be spread equally over a period of four years, effective 2022, for the purposes of Capital Adequacy Ratio (CAR) computation. The International Financial Reporting Standards (IFRS) states that derecognition refers to the removal of an asset or liability (or a portion thereof) from an entity’s balance sheet. Due to the impact of the DDEP on the…