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January 11, 2018

PRA published a letter sent to the CFOs of selected firms on transition disclosures for the IFRS 9 standard on Financial Instruments. Victoria Saporta, Executive Director of Prudential Policy, wrote this letter, in which she summarized letters written by Sam Woods on the PRA expectations about the implementation of the IFRS 9 expected credit loss accounting (ECL) requirements. The letter is intended to set out the PRA expectations on the minimum transition disclosures about ECL.

The transition disclosures aim to help market participants understand how ECL works, what its implications are, and what the implications are of the choices the firm has made in implementing ECL. This letter is addressed to the larger UK-headquartered credit institutions. The expectations it sets out are likely to be relevant to other credit institutions, particularly those that manage their investor-base actively but, as PRA has not discussed transition disclosure with those firms, it is not addressing the expectations to them.

PRA expects a firm to use its best endeavors to publish all the minimum transition disclosures in or by the later of the date on which any separate transition disclosure pack is published and the date on which the Quarter 1 statement is published. If one or more of the disclosures are not published by the later of those two dates, PRA regards it as very important that the omitted information be disclosed as soon as practicable thereafter and in any event no later than the 2018 (or 2018–2019) annual report and accounts.


Related Link: PRA Letter (PDF)

Keywords: Europe, UK, Banking, Accounting, IFRS 9, Transition Disclosures, ECL, PRA

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